Isn’t there a federal tax benefit in that the 529 money grows tax free even if there isn’t a deduction available when putting money in?
ETA: @ArdenNJ - Best post ever on CC! Love that your mom got to enjoy the glory!!
@GnocchiB - I am glad you enjoyed it. More about my mom. She passed away on December 1st, 2011. Call it God’s miracle. She was a very religious lady. She woke up in middle of the night to pray to God for her children. I live in USA since 2004. It was end of November and Thanksgiving Break was upon us. I said let me go to my home country and see my mom. I traveled from US to my country and saw my mom. 2 days later, she passed away. I don’t know what forced me to travel to my home country that Thanksgiving. That was the first and last Thanksiving weekend I spend back in my country after moving to USA. Well, long story short, she didn’t enjoy any glory. Our neighbors did it for her as they were tired of that lady anyway.
Also my mom’s mother(my grandma) died while giving birth to my aunt. My mom and my aunt was raised by a step mom. They had to clean the house for the step mom and all. A true Cindrella story. I didn’t mention this before but I got my wife’s blessing. Once my boys are off to college we will build a school back in our country in the name of my mother and father who didn’t go to any school and didn’t know how to read and write. So whatever money we save will go towards that school we will build.
@ArdenNJ I love your story, too. Marrying your college sweetheart, coming here, working hard and doing so well. It’s very heart warming. The twins have great role models.
@ArdenNJ you honor your parents’ memory with everything that you do, and the school is such a fitting tribute. Beautiful story of overcoming adversity and the blessings of children and grandchildren. Thanks for sharing.
Just read Post #61, @ArdenNJ. You’re going to make us cry, you know. We need to mark this one, NSFW.
@ArdenNJ – THANK YOU for the post about your mother. I have a huge smile on my face. I laughed out loud when you wrote that the neighbor had to move out. (Her son was such a LOSER 
) How gracious of you to think about building a school in your home country!
I wish you and your family the very best. You’re the embodiment of the American Dream. When immigrants succeed, we all succeed.
@ArdenNJ – I believe you will need to file Form 709 with the IRS next spring. Since you have not contributed to 529 plans before, the IRS allows a catch-up contribution, but AFAIK, you need to file paperwork documenting it.
“Start a 529 for each kid seperately and put down $1.5K per month per kid to their 529 accounts. We will also move half of our liquid cash($25K each per kid-total $50K) to their 529 accounts.”
I am not a tax person, so please confirm with someone who is, but I believe you will be fine in contributing in excess of $14K per parent as long as you file Form 709.
To sort of quote another very knowledgeable poster here…do NOT do financial rearranging that you would not otherwise do…if college is the only reason for doing so.
While I strongly advocate saving for college, I am not sure I agree with a portion of your liquid assets…now. The reality is…assets are assets…and you can use those liquid savings to pay for college if need be. The money doesn’t have to be in a 529.
@gearmom - I had to google NFSW 
Thanks for your kind words.
@GnocchiB - Thank you very much really. You have been on this thread with your wonderful comments. Truly appreciate it.
@katliamo - Thank you very much. My company moving me to USA has been the biggest blessing for my family and I. We try to make the best of the opportunity we are given.
@CT1417 - Will look into 709 form. Also based on @thumper1 's suggestion and other’s suggestion, we will sit down with a financial adviser to see our options.
@thumper1 - As I said above, we will discuss all of our options with an adviser. My company has a deal with Ernst and Young and I have free access to their financial advisers.
Just be alerted…many…many financial advisors are not knowledgeable about college financial planning. Make sure the person you use has knowledge of long term planning for this.
And don’t let them sell you an annuity!
There is no “catch-up” provision for 529 plans. What it sounds like you are describing is the ability to make contributions to a 529 account in one year that exceed the annual gift tax exclusion amount, and have it treated as though the contributions are made over five years and thus staying below the annual gift tax limit. And while this does require the filing of IRS form 709 in order to document the transaction and the tax payer’s intent, there is no additional tax payment required.
@BelknapPoint —thank you for clarifying. You are correct; I did not need to pay taxes on the contribution, but had to report the amount of the contribution on Form 709. IIRC, this higher contribution reduced the lifetime gift allowance by the amount of the 529 contribution. Since the lifetime allowance was some figure over $2 million, I felt I was safe that I would not be running up against that limit.
^^^
The lifetime estate and gift tax exclusion for 2017 is $5.49 million; who knows what congress will do with this in future years. As long as a taxpayer does not exceed the annual gift tax exclusion ($14k for 2017), including by superfunding a 529 account and spreading it over five years, there will be no reduction in the lifetime exclusion allowed for the taxpayer.
@BelknapPoint - My in laws in Europe would like to gift our kids $50K each for college down the road. Once they wire the money from Europe to USA how do we report it properly? Is it better if they only send a certain amount each year?
^You moved from not having money set aside to having too much rather quickly. Your boys will have a bright future with such a strong family. Hopefully they are close and have not mastered the talent of arguing about absolutely nothing like my boys.
Not Safe For Work was because you were making us cry.
Under U.S. tax law, gift restrictions and tax liability are imposed on the gift giver, not the recipient. So if your in-laws in Europe are not subject to U.S. tax laws, I would think that they have no worries about making gifts to a U.S. citizen as far as U.S. tax laws are concerned. If your children receive any gift during a year in which their financials must be reported on financial aid forms, the gift would need to be reported on the FA forms so that its availability could be factored into eligibility for need-based aid.
@gearmom - Ain’t that the truth They are twins. They love to fight but they also can’t do without each other. They are best friends as far as we can tell.
@BelknapPoint - Appreciate the input. They aren’t US citizens or Permanent Residents. We offered them to become Permanent Residents but they declined. So we should be good in terms of tax. And we aren’t sure if we will ever need the money they will send. Depending on how we do and if our kids will get any merit aid we might not need their money after all. We shall see.
Ok…looking at some of your past posts…you were contemplating sending your kids to Pingry…whichnis an excellent, but expensive private university.
You also were planning to buy a new home and keep your former one as a rental…to sell to fund college.
Now you are also saying your family will send you a failrly large sum of money for each kiddo.
And your income is high…now, and will likely increase.
Your post question was whether your twins would be eligible for financial aid when they go to,college.
If you are talking about need based aid…I’m going to bet they will not be eleigible for need based aid. You don’t sound like you have financial need…at all. Even now.
Your best bet…when the time comes…will be to look for merit aid potential for your twins. That won’t consider your income, assets, second rental home, money from parents…etc.
Re #69. Even if a fin advisor claims to understand college financial aid, you still need to vet. Many only have a glancing idea of a few options promoted by their firms, not how FA really works.
401k assets are considered QRP, a Qualified Retirement Plan. Protected assets. There’s a question on the CSS about the totals, but it’s minor, to vaguely guage overall fin security, more or less, IF that college is concerned with such.
Also, be aware many feel it’s just unwise to take from QRP to pay for college. The fin planning advice you need now is 2-part. How to plan your own future security, separate from college costs, and what you can peel off for a college fund now, what vehicle(s) best suit you now and in the next 6 years. (And an emergency fund, of course. Living on 250k now, 94k may not last long if a crisis arises. 50k is dropping pretty low.)
Hi @thumper1
We ended up not applying to Pingry due to its cut throat nature. We decided on Newark Academy and applied but they weren’t accepted. Our kidss ISEE scores were bad. Especially the English portion. One of my sons was 3rd stanine out of 9(below average). Regarding house, we put up our current home for sale but didn’t get the offers we expected. Decided to pull out from selling. Like you and others said, we will plan accordingly assuming we will not qualify for any need based aid.
@lookingforward - Thanks for the input. The liqud cash we have is for an emergency. We will hold of any plans until we sit down with a financial planner.