529

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bcboy57
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529

Post by bcboy57 » Mon Feb 22, 2016 3:47 pm

Last year I contributed $ 70,000....'5 year gift tax'.....towards my newborn granddaughter's 529 plan.

Can I write this off on this year's federal or state income taxes ? ....thanks....Doug

livesoft
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Re: 529

Post by livesoft » Mon Feb 22, 2016 3:54 pm

No. There is no tax write-off for a non-charitable gift nor contribution to a 529 plan ...

... except some states do give a tax break.

Do you mean your 2016 taxes or your 2015 taxes? Name the state, consult the state tax laws.
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Leeraar
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Re: 529

Post by Leeraar » Mon Feb 22, 2016 5:46 pm

bcboy57 wrote:Last year I contributed $ 70,000....'5 year gift tax'.....towards my newborn granddaughter's 529 plan.

Can I write this off on this year's federal or state income taxes ? ....thanks....Doug
You did what? :shock:

Who is the owner of the 529? Who is the trustee or adult custodian? Who is the beneficiary? In which state do you file taxes, and in which state is the 529 registered?

L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")

YttriumNitrate
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Re: 529

Post by YttriumNitrate » Mon Feb 22, 2016 6:28 pm

deleted.
Last edited by YttriumNitrate on Sat Mar 12, 2016 12:12 pm, edited 1 time in total.

Leeraar
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Re: 529

Post by Leeraar » Mon Feb 22, 2016 7:15 pm

YttriumNitrate wrote:If you're in Michigan, supposedly only the first $5k/$10k per year is deductible.

http://www.savingforcollege.com/529_pla ... lan_id=161
State tax deduction or credit for contributions:
Contributions to a Michigan's 529 savings plan of up to $5,000 per year by an individual, and up to $10,000 per year by a married couple filing jointly, are deductible in computing Michigan taxable income.
Which is a savings of $440 in state taxes, which is taxable on your federal return. Whoopee!

L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")

ImaBeginner
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Re: 529

Post by ImaBeginner » Mon Feb 22, 2016 11:41 pm

This counts against your no gift tax limit for the next 5 years. So I dont believe you can do any federal write-off.
Some states you can do more than one year for the tax benefit in a lump payment, but not all.

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bcboy57
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Re: 529

Post by bcboy57 » Tue Feb 23, 2016 5:42 am

thanks for the replies......I'm the custodian of the account. It is for my 2015 taxes. Its through Vanguard's 529, therefore through Nevada's apparently.

Leeraar
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Re: 529

Post by Leeraar » Tue Feb 23, 2016 6:20 am

bcboy57 wrote:thanks for the replies......I'm the custodian of the account. It is for my 2015 taxes. Its through Vanguard's 529, therefore through Nevada's apparently.
OK, so there is no MI tax advantage for you. Which is not a bad thing in the long run.

Who is the owner of the account? You? Your granddaughter? Her parents?

If you are the owner, you have not made any gift until she uses the money.

L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")

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happymob
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Re: 529

Post by happymob » Tue Feb 23, 2016 8:03 am

Leeraar wrote:
bcboy57 wrote:thanks for the replies......I'm the custodian of the account. It is for my 2015 taxes. Its through Vanguard's 529, therefore through Nevada's apparently.
OK, so there is no MI tax advantage for you. Which is not a bad thing in the long run.

Who is the owner of the account? You? Your granddaughter? Her parents?

If you are the owner, you have not made any gift until she uses the money.

L.
529 plan contributions are considered present interest gifts, even though you still control the money.

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HueyLD
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Re: 529

Post by HueyLD » Tue Feb 23, 2016 8:23 am

bcboy57 wrote:Last year I contributed $ 70,000....'5 year gift tax'.....towards my newborn granddaughter's 529 plan.

Can I write this off on this year's federal or state income taxes ?
You may not be able to write it off on your income tax returns, but you need to file an informational return on Form 709.

https://www.irs.gov/pub/irs-pdf/f709.pdf
https://www.irs.gov/pub/irs-pdf/i709.pdf

Make the five year election on Schedule A, Line B by following the instructions for this line in the instructions for the form.
If in 2015, you contributed more than $14,000 to a Qualified Tuition Plan (QTP) on behalf of any one person, you may elect to treat up to $70,000 of the contribution for that person as if you had made it ratably over a 5-year period. The election allows you to apply the annual exclusion to a portion of the contribution in each of the 5 years, beginning in 2015. You can make this election for as many separate people as you made QTP contributions.

You can only apply the election to a maximum of $70,000. You must report all of your 2015 QTP contributions for any single person that exceed $70,000 (in addition to any other gifts you made to that person).

For each of the 5 years, you report in Part 1 of Schedule A one-fifth (20%) of the amount for which you made the election. In column E of Part 1 (Schedule A) list the date of the gift as the calendar year for which you are deemed to have made the gift (that is, the year of the current Form 709 you are filing). Do not list the actual year of contribution for subsequent years.

However, if in any of the last 4 years of the election, you did not make any other gifts that would require you to file a Form 709, you do not need to file Form 709 to report that year's portion of the election amount.
Congrats.

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