Posted on 01/23/2015 1:30:30 AM PST by Brad from Tennessee
President Obama is proposing a radical change to the 529 college savings plans held by millions of families, which would require those who use them to rethink their approach to college savings.
As part of his plan to simplify the tax code and help the middle class, one of the 529 plan’s most attractive benefits would be eliminated: Money could no longer be withdrawn tax-free. (The new rules would apply only to new contributions.)
The accounts, many of which are run by the states, allow people to make contributions that grow tax-free. The money can be withdrawn without the paying of capital gains taxes as long as the proceeds are used for education expenses. Many states provide state income tax deductions for contributions as well.
“I was very surprised by the Obama 529 proposal because in many ways it is anti-middle class for families trying to afford college,” said Joe Hurley, founder of the SavingforCollege.com website. “And so much of the emphasis in the Obama administration has been pro-middle class.”
(Excerpt) Read more at nytimes.com ...
Let’s tax saving for college so we can pay for college...
Feds. Each time the audit was triggered because the IRS thought we were under reporting capital gains from the gains on the 529 accounts. Our accountant would send a letter explaining what it was and the IRS would agree. We never actually made an error on the returns nor did we have to pay more. It may have been how our account provider was reporting the information on their IRS submissions or it could have been a bug in the IRS software across-auditing the different reporting.
Another reason to add to the list to implement a (a modified) Fair Tax/consumption tax; get away from the immoral (and, IMHO, unconstitutional) income/tax nightmare!!
I haven’t read the article - it is the New York Times - but the Wall Street Journal editorial today points out that Obama’s proposal grandfathers in past 529 contributions . . . including the $240,000 worth of 529 which the Obamas have laid by for their children . . .
Care to bet on the demographic split on those who use 529s vs those who don’t?
Hint: Obama wants to punish 529ers. That should be enough to answer the question.
529 = White Privilege, according to Obama.
Yep, there’s no reason to tax 529’s to “pay for” any program. He’s never been concerned about spending money the gov’t doesn’t have before,
so, this idea of taxing 529s is simply a punishment.
Well then, that makes perfect sense. The idea probably was the Wookie's.
Funny how whenever the NY Slimes reports on an issue that makes Obozo look like the kleptocratic tinpot dicktater he is, they forego a comments section for the article.
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