Would appreciate any experience/guidance others may have
We‘ve saved a reasonable sum in 529 plan that we would like to use for DS’s educational expenses at WP. This would allow for tax minimization while maintaining original purpose.
As a hypothetical, our understanding would be (apologies that we may not have all terms exactly correct)
- cadet receives initial “loan” of $9K, to be used for initial expenses such as books, equipment, uniforms, etc.
- initial loan is repaid via automatic withdrawals from cadets monthly pay
- additional expenses after “initial expenses” would continue to be extracted from cadet pay and/or pay utilized by cadet directly for payment of these expenses
Is there a way that the initial expenses can be paid via the 529? My understanding is that, if I were to simply transfer funds from 529 to DS’s cadet account, then those funds would be subject to tax, since they wouldn’t be directly attributed to educational expense.
In simplest terms, we don’t understand what mechanism (assuming one exists) can be used for utilizing 529 funds for educational expenses at WP.
Our plan would be that for every $ utilized from 529 for DS educational expenses, DS would transfer same $ to his investment account, maximizing tax efficiency and growth.
As an aside, we recognize there are various alternative options for 529 funds (“pay the tax and use the money yourself, you saved it and prepared your DS, so enjoy it”, “pass it on to DS for possible later graduate expenses”, “pass it on to next generation {grandchildren someday}”, etc.). We think every one of these are valid for different people. We have simply chosen to have always viewed the funds as purposed for DS
Thanks in advance for any directions/insights
I guess we should also ask whether there is a “finance department” at WP that might be able to guide us?
We‘ve saved a reasonable sum in 529 plan that we would like to use for DS’s educational expenses at WP. This would allow for tax minimization while maintaining original purpose.
As a hypothetical, our understanding would be (apologies that we may not have all terms exactly correct)
- cadet receives initial “loan” of $9K, to be used for initial expenses such as books, equipment, uniforms, etc.
- initial loan is repaid via automatic withdrawals from cadets monthly pay
- additional expenses after “initial expenses” would continue to be extracted from cadet pay and/or pay utilized by cadet directly for payment of these expenses
Is there a way that the initial expenses can be paid via the 529? My understanding is that, if I were to simply transfer funds from 529 to DS’s cadet account, then those funds would be subject to tax, since they wouldn’t be directly attributed to educational expense.
In simplest terms, we don’t understand what mechanism (assuming one exists) can be used for utilizing 529 funds for educational expenses at WP.
Our plan would be that for every $ utilized from 529 for DS educational expenses, DS would transfer same $ to his investment account, maximizing tax efficiency and growth.
As an aside, we recognize there are various alternative options for 529 funds (“pay the tax and use the money yourself, you saved it and prepared your DS, so enjoy it”, “pass it on to DS for possible later graduate expenses”, “pass it on to next generation {grandchildren someday}”, etc.). We think every one of these are valid for different people. We have simply chosen to have always viewed the funds as purposed for DS
Thanks in advance for any directions/insights
I guess we should also ask whether there is a “finance department” at WP that might be able to guide us?
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