529 Account Question

[AC7179]

Is the money that I put into my daughter's 529 account not taxed, or just the interest that the account earns?

I thought it was the whole college savings, but was told today just the earnings? Really?

 

[Galahad]

You cannot deduct the contributions like a 401K, but it will grow tax free after that and then will be taxed at the student's rate when you take it out to spend it.

 

[AC7179]

Thanks for the info!

 

[janette]

Nothing is taxed when you withdraw it; you do pay taxes on the money before it goes into the account.

I believe I'm correct on this but here is a website with some information http://www.johnhancockfreedom529.com/public/page/?pageid=64

 

[Galahad]

Thanks for the info!

I need to make a correction - it's not taxed when you take it out for education at the end but it will be if you use it for anything else.

Good Luck