Gifting to Your 529
Tis the season to put your money where your mouth is. Do you always say, “I wish my kids didn’t get so much stuff”?? If so, you can give family and friends another option this holiday season: Making a gift to your child’s 529.
Most 529 plans allow you to create a gifting page or link, allowing others to contribute directly to your child’s 529. And as a financial advisor, I can tell you that many grandparents are looking for ways to help with their grandchildren’s college. Creating a gifting page and sharing it with friends and family is a great way to help others who want to be generous with your kids and to avoid accumulating more stuff.
Gifting pages are great for people who want to make small donations, since typically the minimum contribution is simply the plan’s minimum contribution– usually $25 or less. And if that seems like it’s just a drop in the bucket, all those drops add up. If people gifted $100 into your child’s account every year for both their birthday and the holidays, after 18 years you’d have more than $7,000.
Anyone can contribute to your child’s plan through the gifting page that you share; if they’re a resident of your state, in many cases they’re eligible for any state tax benefits that the plan offers just as you would be. And as long as they give less than the annual gift tax exclusion amount ($15,000 in 2021), no tax filings or taxes are due– it’s just a gift. (Stay tuned– more to come about larger contributions.)
If enough of us do this, maybe we can add “529 Wednesday” after Cyber Monday and Giving Tuesday?
Want to put this to work for you? Sign up for The College Financial Plan Masterclass. You’ll develop a detailed financial plan for college, learn strategies to maximize financial aid and merit scholarships, find out how to qualify for tax credits and other benefits, and get your student a great college education at a price that won’t knock your family’s other financial goals off the rails. Sign up now! Just $299.
