A Quick 529 Tax Tip That Could Save You Big Money
Many states allow account holders to withdraw contributions shortly after making them, meaning you could get a tax break for adding money you plan to spend on college this fall.
Note: This article is part of Morningstar's October 2013 College-Savings Boot Camp special report. This article originally appeared July 30.
Question: My son will be entering college in the fall, and I own a 529 college-savings account in his name. Rather than pay tuition directly to the school, can I add the money to the 529 so I can claim the state tax deduction and then withdraw it to pay tuition?