<p>Wondering how you all handle the disbursement from your kids 529's. We're trying to decide how much to take out each year, take it out evenly, or keep it in and save it for when we have two in school at the same time. Dh is of the mindset that anything we can do to not touch it until later will make it easier once we have two in college. </p>
<p>Also, how do you get the money out of the accounts? Does the money get sent directly to the institution or to your child or to you?</p>
<p>We use it to pay room and board. Those expenses are qualified expenses for which 529 money can be used. However, room and board expenses are not expenses that can go towards the tax credit. So, our plan of attack is to pay r/b out of 529 money, fees and books out of pocket. </p>
<p>By the year we have 2 in school, the oldest’s money will be gone. As I look forward at my budgets for the coming years, it looks like it’ll be easier to pay as I go as I won’t have the expenses incurred by kids at home (piano lessons, ec fees, countless admission to basketball and other sporting events, etc). My spreadsheets tell me I can probably double the amount designated for college by the time I’m got an empty nest. </p>
<p>We request the money be sent directly to the institution.</p>
<p>My son is a freshman and we took out 1/2 of his costs from the 529 and paid the rest out of pocket. At this rate, we will have enough in the 529 to last all 4 years and he can graduate debt free. We were able to afford the 1/2 out of pocket because his twin sister took a full ride offer that also pays for room and board so we have no costs for her until graduate school. Graduate school has always been in her plans but never really in his. Hopefully when she gets there we can do the same for her as we did for him and she can graduate from graduate school debt free. Now we didn’t qualify for any need based aid so future FAFSA calculations didn’t factor into our decision - but there may be a better way to spend that money that would minimize future EFC’s.</p>
<p>We had the check sent directly to the institution.</p>
<p>Whatever you do, just make sure you take it out in the right year where the qualified cost is incurred in the year that you took in out. Basically during freshmen year, don’t take money out in December to pay for the spring term, make sure to take it out after new year. Othewise, you will be liable for tax on excess withdraw.</p>
<p>Our 529 direct deposit the money directly into our checking account or any bank account that you specify and send us the tax form at the end of the year.</p>
<p>ttparent, What you described is exactly what i just did. I took out the money from the 529 for spring semester in December as the bill was due December 15. I would hope they would classify that as for spring semester since I had it sent directly to the school but now I am wondering if I should have done this a different way.</p>
<p>tt is correct unless you are sending the check directly to the school; you can redeem in December for Spring as long as the school has a record that it was to pay for spring tuition…</p>
<p>we have been advised for years to send directly to the school to avoid that exact confusion…</p>
<p>momoftwins…you are fine if it is sent to the school…</p>
<p>Is there any chance of qualifying for financial aid when you have two students in college at the same time? If so, I would suggest to use up the 529 plan money as quickly as possible, e.g. for every allowable expense, so that it isn’t counted against you in the financial aid determination.</p>
<p>I had called our 529 financial institution (planning for the bills to come), and was told that to get money out, a check must be requested from them each time it is needed. I was kind of surprised, since I would have expected to get a check book or a debit card (like for HSA type accounts). Do all of them work that way?</p>
<p>I did not know that the financial institution will do it the right way if you make them send the check directly to the school. Hopefully, all financial institutions know how to do that, mine was directly sent to me and they report it on the tax year that the money was taken out. Luckily, I did not pay all with 529 the first year when I took some out in December for the spring semester, otherwise, it would have been a problem with tax.</p>
<p>anothermom2, yes you need to request the money each time. It is not a debit account, they have to carefully track and report the activities to the IRS. HSA is pretax money that you get reimburse, 529 gain could be income if you don’t spend on the right thing.</p>
<p>If the money was put in post-tax is it still taxed again, or is it taxed as capital gains? For some reason I thought we did this to avoid taxes on it.</p>
<p>The withdrawals are tax-free as long as all the rules are followed. ttparent is talking about accidently taking out too much, then taxes and penalties can be due. </p>
<p>We have the money sent directly to our D, which she deposits into her checking account and pays her bills, which includes rent on her off-campus apartment.</p>
<p>I would have preferred having our 529 money sent to the college, but our college has so many little timing issues, it makes it difficult. So, I just had the money sent to me and I put it in my checking account. So, I would suggest being fully aware of the required payment deadlines and other issues of your college before definitively making up your mind.</p>
<p>We had the check sent directly to the school; we decided that since it is very conservatively invested right now was better just to spend it down and handle the rest on our own…which will we do. I do tell everyone I know who is having a baby to start a 529 asap!</p>
<p>I have been able to pay all college bills with credit card. I pay the bills, then request reimbursement of qualified expenses from 529 plans to me. Credit card travel rewards are nice. I wanted to use 529 money first. I did not want a kid to graduate and be stuck with 529 money with nothing to spend it on. After zeroing out the 529 account for son #2, we changed the beneficiary of son #1’s account (to son #2) and zeroed that one out too. We are now proceeding to pay with other college savings assets, but are getting close to the end… I think/hope.</p>
<p>Use up the 529 as soon as you can because then it will not count as an asset for the following year’s FAFSA and you may do better on financial aid.</p>
<p>We electronically transfer 529 funds into our bank account after charging tuition on our credit card in order to get 1% cash rewards. We then pay our credit off with 529 proceeds.</p>
<p>Very nice if there is no charge on these transactions. My kids school charge 2% to use credit card.</p>
<p>No charge, no fees!</p>
<p>Yea…2% here too. I’m surprised any colleges allow fees to be paid with a credit card without charging a “convenience fee.” Sure wish mine did…</p>
<p>I have two 529s of about equal size, one for each kid. One goes to a more expensive school than the other, who also got a nice scholarship. Can I pay son’s expenses with daughter’s account? Or can it be transferred?</p>