Gifting Strategy #3

Another option for gifting to establish a 529 college savings plan. Individuals can contribute up to $70000 without gift tax issues, and up to $140000 with spousal consent. However giving the maximum can wipe out up nearly 4 years of gift tax exclusion, so it’s best to consult a tax advisor if you choose to contribute sums in this neighborhood.

However, withdrawals from these plans are tax free when used for tuition, books and fees.

Those who live in MI will have a tax deduction for amount put into the plan if they choose a MI 529 plan. Deductions are allowed for up to $5000 on an individual return and $10000 on a joint return. Funds DO NOT have to be used for a MI college however.

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