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Facts About New Jersey's 529 Plans

By    |   Thursday, 28 May 2015 10:03 AM

As the cost of attaining a college education continues to climb, parents across the U.S. are taking advantage of so-called 529 plans to save early. This program has a number of benefits, including the opportunity to store away income with deferred tax payments.

Across the U.S., however, every state has its own specific 529 plan that has variances. Below are six facts about New Jersey’s exclusive 529 plan, which is known as NJ Best:

1. As noted on the Savingforcollege.com, New Jersey actually offers two 529 savings plans. The NJ Best plan is available only to residents within the state, and another plan, known simply as the Franklin Templeton 529 College Savings Plan, is sold nationwide.

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2. Unlike some states, New Jersey’s NJ Best 529 plan
does not have household income restrictions, meaning anyone can participate in the program.

3. While 529 plans are oftentimes associated with paying tuition
, funds stored away through the NJ Best program can go toward other incidentals as well. As noted on the program’s official website, funds can be withdrawn and applied toward books, computers, and room and board.

4. It is important to gain a thorough understanding of which schools accept 529 plan funds. NJ Best can only be applied to so-called accredited schools that participate in student aid programs administered by the U.S. Department of Education.

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The good news is, there are a wide range of post-secondary colleges, universities, and vocational schools that fall within this eligibility requirement. Some participating higher education institutions are even outside the U.S.

5. Depending upon the specific type of 529 plan opened, New Jersey residents generally have large leeway in the amount of money contributed to a plan – from as little as $25 to as much as $300,000 per beneficiary throughout the life of the account.

6. In New Jersey, 529 plans can be contributed toward estate planning. Five years worth of gifts – $70,000 for an individual tax filer and $140,000 for a married couple – can be made at once to a plan without the person or couple having to pay the usually mandatory federal gift tax. There is a caveat: No other gifts can be made to the same beneficiary throughout the next five years.

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As the cost of attaining a college education continues to climb, parents across the U.S. are taking advantage of so-called 529 plans to save early. This program has a number of benefits, including the opportunity to store away income with deferred tax payments.
529 plan, facts, new jersey
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2015-03-28
Thursday, 28 May 2015 10:03 AM
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