Author Topic: 529 and other educational savings plans for graduate school  (Read 328 times)

dragonwalker

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Right now I'm 33 and going to be going back to school in the next few months to start my MBA. Total cost of the program is expected to be about $30K. My employer will currently be paying about $20K. The way it will work is that I will be reimbursed for school related expenses after every semester until I hit the $20K cap. Under this arrangement is there anything else I can do financially to pay less? I was thinking a 529 plan but not sure how that would work where my expenses would be mostly reimbursed?

EvenSteven

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Re: 529 and other educational savings plans for graduate school
« Reply #1 on: June 02, 2021, 09:45:58 AM »
A 529 might be useful in this situation, depending on your state. Growth in this account will be tax free, but because you have such little time to allow growth, this account feature probably won't amount to much.

Depending on your state, you might get a state tax break for 529 contributions. So you could contribute to get the state tax break, then take it right back out to pay expenses.

Morning Glory

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Re: 529 and other educational savings plans for graduate school
« Reply #2 on: June 02, 2021, 10:09:54 AM »

Depending on your state, you might get a state tax break for 529 contributions. So you could contribute to get the state tax break, then take it right back out to pay expenses.

Some states only give you the tax break on contributions net of withdrawals, effectively disallowing "washing" funds through the 529 to get the tax break.

If you pay your tuition with a credit card you could get aa few sign up bonuses.

dragonwalker

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Re: 529 and other educational savings plans for graduate school
« Reply #3 on: June 03, 2021, 04:54:09 PM »
I live in CA. If I pay any part of this with a credit card there is a 3% charge effectively taking away any benefit with paying other than cash. Is there any benefit to a 529 on my federal taxes.

EvenSteven

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Re: 529 and other educational savings plans for graduate school
« Reply #4 on: June 03, 2021, 07:37:29 PM »
I live in CA. If I pay any part of this with a credit card there is a 3% charge effectively taking away any benefit with paying other than cash. Is there any benefit to a 529 on my federal taxes.

For federal taxes it works just like a Roth IRA for education expenses: you won’t pay any taxes on capital gains or dividends.