SECTION 529 Education Saving account


N

nativecrafts

We opened an account under Section 529 for education saving for our children. Do we have to report it to IRS on form 1040? We do not get any deduction from federal taxes for saving in this account.
 
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P

Phil Marti

We opened an account under Section 529 for education saving for our children. Do we have to report it to IRS on form 1040?
No. Do check to see if your state offers some deduction or credit.

Phil Marti
VITA/TCE Volunteer
Clarksburg, MD
 
W

william.aitken

No. Do check to see if your state offers some deduction or credit.
Also, depending on how much money you put into the account, you may have to file a gift tax return.
 
J

JoeTaxpayer

Also, depending on how much money you put into the account, you may have to file a gift tax return.
Ok, yes, specifically, in 2013 the gift limit is $14,000. Deposit
$14,000 or less and no gift tax or paperwork.
If more than $14,000, but less than $70,000, you are using up to 5
year's gifting to make a front loaded deposit, i.e. permitted to gift in
advance. A form 709 is required for reporting, but no tax due. If over
$70K, you would be taking a credit against your unified lifetime credit
of $5.25M and still no tax due.
It's as simple as that. (Unless of course, I missed a minor detail.)
 
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W

william.aitken

Ok, yes, specifically, in 2013 the gift limit is $14,000. Deposit
$14,000 or less and no gift tax or paperwork.
If more than $14,000, but less than $70,000, you are using up to 5
year's gifting to make a front loaded deposit, i.e. permitted to > gift in advance. A form 709 is required for reporting, but no tax > due.
If over $70K, you would be taking a credit against your
unified lifetime credit of $5.25M and still no tax due.
Thanks for adding the details, I didn't know the annual limit off
the top of my head, and wasn't somewhere I could look it up.

Since the original poster said "we" and "children", it's probably
worth emphasizing that the limits are per donor/recipient pair. So parents can put $28K per child in every year with little or no paperwork.
 

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