529 Plan Limit

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Abk911
Posts: 56
Joined: Thu Aug 09, 2018 1:22 pm

529 Plan Limit

Post by Abk911 » Tue Dec 03, 2019 2:07 am

Dear Friends.. We are considering doing a 529 in CA for our child. I am considering the Utah plan.
I was wondering if the limit is 15000 for total or between me and my wife we can aim higher than that.

Also... if its allowed to be higher than 15k... can it go from just my account? or does it need to have a deposit trail from both me and my woes account. as in 15k from me and above that from my wife?

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Wiggums
Posts: 1922
Joined: Thu Jan 31, 2019 8:02 am

Re: 529 Plan Limit

Post by Wiggums » Tue Dec 03, 2019 2:15 am

Abk911 wrote:
Tue Dec 03, 2019 2:07 am
Dear Friends.. We are considering doing a 529 in CA for our child. I am considering the Utah plan.
I was wondering if the limit is 15000 for total or between me and my wife we can aim higher than that.

Also... if its allowed to be higher than 15k... can it go from just my account? or does it need to have a deposit trail from both me and my woes account. as in 15k from me and above that from my wife?
Annual Exclusion
Individuals are allowed to gift a certain amount each year before triggering gift tax issues. This amount, known as the annual exclusion is $15,000 for tax years 2018 and 2019 and applies to the individual making the gift—not the recipient. So a married couple filing a joint tax return could potentially give up to $30,000 without triggering gift tax issues.

Giving More Than the Maximum
You’re free to gift more than $15,000 to the same person in one year. However, you must remember to report the gift to the IRS on Form 709, as it is required. However, this isn’t as bad as it sounds. You won’t necessarily need to pay taxes on the gift as it may potentially apply to your lifetime exclusion.

Five-Year Election
For 529 contributions, the IRS allows up to five years’ worth of contributions at once with the potential to avoid gift tax consequences. An individual could contribute $75,000 (or $150,000 for a married couple) to a beneficiary’s 529 in one lump sum, but your IRS Form 709 must reflect your option to take the five-year election.

Topic Author
Abk911
Posts: 56
Joined: Thu Aug 09, 2018 1:22 pm

Re: 529 Plan Limit

Post by Abk911 » Tue Dec 03, 2019 2:39 am

ok. thanks for this.

just one last question. If I and my wife both want to give 15k each (total 30k). does it have to come from different account or mine alone is fine. we don't have a joint account (as in we don't use that account much)
also .. I am assuming this won't trigger any extra form during taxation?

Grt2bOutdoors
Posts: 21468
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: 529 Plan Limit

Post by Grt2bOutdoors » Tue Dec 03, 2019 5:42 am

Abk911 wrote:
Tue Dec 03, 2019 2:39 am
ok. thanks for this.

just one last question. If I and my wife both want to give 15k each (total 30k). does it have to come from different account or mine alone is fine. we don't have a joint account (as in we don't use that account much)
also .. I am assuming this won't trigger any extra form during taxation?
Do you file married jointly or married filing single?
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

livesoft
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Joined: Thu Mar 01, 2007 8:00 pm

Re: 529 Plan Limit

Post by livesoft » Tue Dec 03, 2019 6:02 am

If I was spending $30,000 on a 529 plan, then I would read the IRS Publication 970 about them and their rules.
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Topic Author
Abk911
Posts: 56
Joined: Thu Aug 09, 2018 1:22 pm

Re: 529 Plan Limit

Post by Abk911 » Tue Dec 03, 2019 10:14 am

Grt2bOutdoors wrote:
Tue Dec 03, 2019 5:42 am
Abk911 wrote:
Tue Dec 03, 2019 2:39 am
ok. thanks for this.

just one last question. If I and my wife both want to give 15k each (total 30k). does it have to come from different account or mine alone is fine. we don't have a joint account (as in we don't use that account much)
also .. I am assuming this won't trigger any extra form during taxation?
Do you file married jointly or married filing single?
married filing jointly.

Grt2bOutdoors
Posts: 21468
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: 529 Plan Limit

Post by Grt2bOutdoors » Tue Dec 03, 2019 1:01 pm

Abk911 wrote:
Tue Dec 03, 2019 10:14 am
Grt2bOutdoors wrote:
Tue Dec 03, 2019 5:42 am
Abk911 wrote:
Tue Dec 03, 2019 2:39 am
ok. thanks for this.

just one last question. If I and my wife both want to give 15k each (total 30k). does it have to come from different account or mine alone is fine. we don't have a joint account (as in we don't use that account much)
also .. I am assuming this won't trigger any extra form during taxation?
Do you file married jointly or married filing single?
married filing jointly.
Write the check from your account, you should be fine. As noted earlier, there is no taxation on gifts within the limits, you may contribute each or in total $30K per year with no tax ramifications. You may also choose to do a 5 year forward averaging and contribute up to $150K jointly by filling out Form 709.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

kaneohe
Posts: 5954
Joined: Mon Sep 22, 2008 12:38 pm

Re: 529 Plan Limit

Post by kaneohe » Tue Dec 03, 2019 1:07 pm

from instructions for form 709: Interpret how you wish. Some think if you give $30K of community property (however it is titled if it really is community property), it is considered made half by each spouse so filing not required.

"Who Must File
In general. If you are a citizen or resident
of the United States, you must file a gift tax
return (whether or not any tax is ultimately
due) in the following situations.
• If you gave gifts to someone in 2019
totaling more than $15,000 (other than to
your spouse), you probably must file Form
709.....................................
• If a gift is of community property, it is
considered made one-half by each
spouse. ..............................."

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