Grandparents can help with college and lower taxable income.
A grandparent helping their grandchild pay for college can be a win all around. When a grandparent that contributes to a 529 savings plan, it lowers assets within the grandparent’s estate. This helps lowering estate tax.
Another great thing about a grandparent who owns a 529 college savings plan is that the account isn’t taken into consideration when the grandchild is applying for financial aid.
Grandparents and other taxpayers can contribute $70,000 at one time to a Section 529 college savings plan. It should be noted that $14k is the annual gift deduction amount and the $70k accounts for what would be spread out over five years and in this case can be made at once. A married couple can contribute up to double that amount to a grandchild’s 529 plan account by “splitting” the gift.
We’re always happy to help you set up a 529 or provide any other service that helps you meet your goals for saving for college. Everyone has a unique situation and it’s always best to get advice from a professional that understands where you are financially.
Do you have the support you need to manage your small business bookkeeping?
Contact us to schedule an appointment to speak with a local small business advisor.