Answer True or False about 529 College Savings Plan:
1) If you open a 529 College Savings plan you are locked into investing in low yielding risk free securities.
2) If you are saving to finance a higher education, then you will have to save less to reach your goal if you save via a 529 college savings plan than if you simply buy the same investments as the plan but do it via an ordinary stock market account.
3) If you own a New York State 529 College Savings Plan, up to $10,000 is deductible annually from New York State taxable income for married couples filing jointly; single taxpayers can deduct up to $5,000 annually.
4) The money invested in your 529 College Savings Plan grows deferred from federal and state income taxes.
5) You won't have to pay federal or state income taxes on the money you withdraw from your 529 College Savings Plan if the money is used to pay for qualified higher-education expenses.
6) The Federal Tax Cut and Jobs Act of 2017 that was signed into law on December 22, 2017 enables 529 plan owners to withdraw assets to pay for K-12 tuitions up to $10,000 per year beginning in 2018. These withdrawals will have no federal tax impact. The indivudal will not be taked on the plan earnings if used to fund K-12 education within the laws limits.
Solution 1: False
A 529 college saving plan is provided by IRS which a tax saving plan introduced by colleges to encourage saving patterns among college student. These savings are generally meant to accumulate a corpus to fund future educational expenses.
A 529 savings plans initially invests in aggressive securities to have a faster growth in portfolio value and then it gradually shifts to conservative assets as it approaches to maturity. Therefore, the given statement is incorrect.
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