Section 529 Plans

These plans are generally specific to a state, providing state deductions if the tax payer lives in the same state as the plan is based. The 529 plan earning are tax free as are the withdrawals. Money must be used for higher education, something after high school. Check out MI 529 plans for one of the few state deductions left. Some allow contributions of as little as $25.00, the max is $5,000 from an individual or $10,000 from a couple. That’s a huge tax deduction. They generally allow for a transfer of ownership if your child is fortunate to get a full ride somewhere and you want to put the money in another person’s name. Not a bad option.

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