Headquartered in Orlando, Florida, International Assets Advisory is a money management and full-service brokerage firm catering to clients all over the world. International Assets Advisory’s suite of services includes the provision of education funding strategies, such as the use of 529 plans.
Named after Section 529 of the Internal Revenue Code, 529 plans are tax-advantaged saving plans created to promote savings for future college expenses. A 529 plan is exempted from federal taxes and commonly has state-level tax benefits, which are applicable in states that levy income tax. Under federal law, 529 plan balances cannot exceed the expected cost of the beneficiary’s qualified education expense. Every state has its own plan balance limit, ranging from $235,000 to $520,000.
There are two kinds of 529 plans, the first being prepaid tuition plans. These plans enable an account holder to buy credits or units at participating colleges or universities for future mandatory fees and tuition at current prices, thus locking in their total costs. In general, these plans cannot cover room and board expenses. Most prepaid tuition plans are sponsored by state governments but are not backed by the federal government.
The second kind of 529 plan, college savings plans, are sponsored by state governments. They enable an account holder to open an investment account to save for eligible higher education expenses including mandatory fees, tuition, as well as room and board. In addition, beneficiaries can choose from a variety of investment portfolio options, such as exchange-traded funds and mutual funds. You should consult with your accountant/tax specialist prior to investing.
