We had ennough in the kids 529 plans to pay full costs of tuition. We have been paying housing out of income not the plan funds . We now have had the ( obviously tremendously fortunate ) news that a relative will be paying tuition next year. Our child will be living in a private apartment, not campus housing. Can we use what’s in the 529 to pay for some of the cost? My understand us that we can do that up to the cost that is estimated for on campus housing. How do you get proof of the on campus housing estimate? What kind of records do we need? Do we write a check out of the 529 plan to ourselves? To the landlord?
Very confused. Great problem to have I know!! ( I also know that we could save 529 for grad school but not sure that kids will do grad school) If there’s money leftover any suggestions? Can you make a charitable donation of 529 fund?
You can use the amount for room and board on the college’s COA. Just print it out from their webpage. You can have the money directly deposited in your child’s account to pay for their rent and food.
Be sure to maximize your use of the 529 such as computer, internet service, books, transportation, etc. Another relative can become the beneficiary. If the student receives a scholarship there is a provision to withdraw that amount from the 529 without penalty (will have to pay taxes). Don’t know about charitable donation. Surely you have a tax/financial advisor?
Transportation/travel is not a 529 qualified expense.
Also not a 529 qualified expense, and will not avoid the 10% penalty.
This will still impact FA, as it will be considered untaxed income to the student and must be reported. And it’s highly unlikely that there would be any taxes to be avoided.