529 for future childrens\' educational expenses

[Phoenixdown99]

Hi,

I'm interested in starting a 529 for future childrens' educational expenses.

I'd also like to save on state taxes if possible

I live in Virginia

Can anyone advise me about how to set this up?

Thanks so much

[Phoenixdown99]

Also does it make sense to contribute $4000 if I can deduct $4000 in state taxes, or less since I can write off my state taxes

[FIREshrink]

Yes. Name yourself as beneficiary.

[ENT Doc]

FIREshrink wrote:

Yes. Name yourself as beneficiary.

Click to expand...

So what happens when future child comes along and there is more than the 5 year lump sum in the account and you transfer beneficiaries to that child?  Does this get treated as a gift, all in that tax year?  Same thing with change of ownership with overfunding.  I'm curious about the logistics of how this gets transferred in the future without hitting the estate tax exemption or any other taxation.

[FIREshrink]

I imagine you'd use the five year lump sum exemption for 529s, then five tears later move the rest.

[ENT Doc]

FIREshrink wrote:

I imagine you’d use the five year lump sum exemption for 529s, then five tears later move the rest.

Click to expand...

Oh so you'd have to create a separate 529 with you as the owner and them as the beneficiary and then transfer in from the old account where you were the owner and beneficiary.  Otherwise, if you just make them the beneficiary on the old account I could see that all being viewed as a gift in the same tax year.

[FIREshrink]

It's probably what I would do, to be safe. But I never faced that situation. We funded my son's 529 before he was born, but it was under $70,000 so when we got his SSN we just changed the beneficiary from spouse to son.

[Phoenixdown99]

Does it make sense to fund $4000 a year if that is the max I can deduct from Virginia state taxes?

Does it even make sense to do that vs. write the taxes off and put the money in a taxable account?

[FIREshrink]

Depends on many factors but we view 529s as a giveaway to the rich and, therefore, make liberal use of them.

[The White Coat Investor]

Phoenixdown99 wrote:

Hi,

I’m interested in starting a 529 for future childrens’ educational expenses.

I’d also like to save on state taxes if possible

I live in Virginia

Can anyone advise me about how to set this up?

Thanks so much

Click to expand...

You can put it in your name then change the beneficiary later.

But seriously? Just wait til they're born.

[Hank]

I'd capture the full $4,000 per year that’s tax-favored in Virginia.

[q-school]

if you are young and have hope of significant administrative positions, you may consider getting your own mba.

you can set start setting aside money for yourself.  if you want to educate yourself in retirement, same.

it appears the MD is not good enough any more.

 

 

[Phoenixdown99]

Yes, MBA is an option I am considering as well

Thanks

[Doctor Money Matters]

If you want to be an administrator get the MBA. If you want to educate yourself on investing why would you get an MBA? I did a podcast episode about physician mbas (whether to get them or not)

http://www.doctormoneymatters.com/episode-9-joseph-kim-md-what-you-need-to-know-before-getting-an-mba/

[q-school]

then again, it looks like this guy made it all the way to cmo without an mba

https://www.stjudemedicalcenter.org/about-us/newsroom-and-highlights/press-releases/2017/st-jude-appoints-new-chief-medical-officer/