By Wendy Irvine
Ready to burst with excitement that your baby is about to have a baby? This momentous occasion calls for a special gift; but before you snap up that adorable crib, think bigger. Way bigger.
Think 529…and we’re not talking blue jeans. A 529 (named after Section 529 of the Internal Revenue Code) is a college-only savings vehicle that can dramatically impact your grandchild’s future.
How? Grandparents can open a 529 for their grandchild and invest in the 529 up to $12,000 a year per grandparent, with the recipient incurring no gift tax. (Further, although the feds don’t let grand donors deduct the gift, many state income tax regulations do ; check your state tax board for details.)
Like a well-tended seed, your grandchild’s 529 will flourish, thriving not on sun or water but on the beauty of time
And there’s one last gorgeous “benny”: Once it’s cracked open, 529 funds are entirely tax free.