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529 Contribution limit for 2018

Posted: Mon Nov 13, 2017 1:08 pm
by katnok
I see that annual gift tax exclusion for 2018 is $15,000.
Based on this, is it correct to assume that I can contribute upto $15,000 to a 529 account in 2018?

Thank you.

Re: 529 Contribution limit for 2018

Posted: Mon Nov 13, 2017 1:17 pm
by Chadnudj
Yes, you individually can contribute $15k.

Your spouse (if you have one) could contribute another $15k.

And you could repeat this for multiple accounts (i.e. if you have 3 kids, $30k per in each).

Now, that doesn't mean you'd get to deduct the full $30k (or $90k) in contributions from your state tax -- there, the limit/maximum of how much you can deduct is different. In Illinois, for instance, you can deduct up to $10k individually, or $20k for a married couple, in contributions to the Illinois 529 plan from your income for state income tax purposes -- which works out at the 4.95% flat tax rate (ugh regressive taxes) to $990 in state income tax savings for a married couple contributing the $20k maximum.

Re: 529 Contribution limit for 2018

Posted: Mon Nov 13, 2017 7:04 pm
by katnok
Thank you, chadnudj.

I live in PA, which allows the full amount to be deducted from state taxes.