#529-plans

#529-plans

Unless you're writing a check from your bank account, the logistics of gifting funds can get a bit complicated.If you want to gift from your IRA, your only option is to sell a chunk of it, then pay any taxes due, then write a check. That's not terrible, so long as you understand the tax implications. IRA withdrawals are typically subject to ordinary income tax, along with penalties if you're not yet 59½.

For each account, annual contributions would be capped at $5,000, an amount that would be adjusted for inflation. The idea is for parents, relatives and even the employers of caregivers to pitch in money over time. The federal government, as well as state, local or tribal governments, could also contribute and aren't subject to the cap. The accounts would be locked up until the child turns 18.