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Bxgell2
Perfection
Member since 5/05 16438 total posts
Name:
Beth
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529 account question
If my parents want to contribute to Alex's 529 account, can they send a check to it, in her name, directly? Or do they have to write us a check and we transfer the funds to her 529? Anyone know?
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Posted 3/27/07 9:22 PM  |
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Long Island Weddings
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ddunne2
LIF Adult
Member since 7/05 4189 total posts
Name:
Doreen
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Re: 529 account question
We have our 529's in Ohio and you can make a one time payment to the account through an online deposit.
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| Posted 3/27/07 9:30 PM |
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Little-J-Mommy
I'm a Big Brother
Member since 5/06 8041 total posts
Name:
D
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Re: 529 account question
the way I understand it is in order for you to get the tax write off, they need to send the check to you and then you put it in.
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| Posted 3/27/07 9:35 PM |
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Bxgell2
Perfection
Member since 5/05 16438 total posts
Name:
Beth
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Re: 529 account question
Posted by Little-J-mommy-to-be
the way I understand it is in order for you to get the tax write off, they need to send the check to you and then you put it in.
Ohhh yeah, I forgot about that... good idea.
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| Posted 3/27/07 9:57 PM |
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CookiePuss
Cake from Outer Space!
Member since 5/05 14021 total posts
Name:
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Re: 529 account question
Posted by Bxgell2
Posted by Little-J-mommy-to-be
the way I understand it is in order for you to get the tax write off, they need to send the check to you and then you put it in.
Ohhh yeah, I forgot about that... good idea.
Exactly, but I'm not entirely sure PA offers the same state tax incentive as NY - plus, you might be phased out of the credit depending on AGI.
If it's a sizable amount, they may want to use their gift tax exclusions for the contribution and the ablitiy to front load the gift and spread it over 5 year.
But to answer your question, they can send it directly to her account. Most company's send "Investment Slips" with the statements so you can just include that with the check.
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| Posted 3/28/07 8:21 AM |
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Bxgell2
Perfection
Member since 5/05 16438 total posts
Name:
Beth
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Re: 529 account question
Posted by shamrock124
Posted by Bxgell2
Posted by Little-J-mommy-to-be
the way I understand it is in order for you to get the tax write off, they need to send the check to you and then you put it in.
Ohhh yeah, I forgot about that... good idea.
Exactly, but I'm not entirely sure PA offers the same state tax incentive as NY - plus, you might be phased out of the credit depending on AGI.
If it's a sizable amount, they may want to use their gift tax exclusions for the contribution and the ablitiy to front load the gift and spread it over 5 year.
But to answer your question, they can send it directly to her account. Most company's send "Investment Slips" with the statements so you can just include that with the check.
PA does offer an incentive, but I know that last year, because of our AGI, we didn't qualify, so I guess I may as well let my parents send in the gift as a check themselves.
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| Posted 3/28/07 8:30 AM |
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CookiePuss
Cake from Outer Space!
Member since 5/05 14021 total posts
Name:
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Re: 529 account question
Posted by Bxgell2
PA does offer an incentive, but I know that last year, because of our AGI, we didn't qualify, so I guess I may as well let my parents send in the gift as a check themselves.
I have the same issues.
If your parents aren't in a high bracket, why not let them open a 529 plan with Alex as the beneficiary, one of your parents as the owner and let them take the tax credit?
On another note, any new news? 
Message edited 3/28/2007 8:33:32 AM.
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| Posted 3/28/07 8:33 AM |
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Bxgell2
Perfection
Member since 5/05 16438 total posts
Name:
Beth
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Re: 529 account question
Posted by shamrock124
Posted by Bxgell2
PA does offer an incentive, but I know that last year, because of our AGI, we didn't qualify, so I guess I may as well let my parents send in the gift as a check themselves.
I have the same issues.
If your parents aren't in a high bracket, why not let them open a 529 plan with Alex as the beneficiary, one of your parents as the owner and let them take the tax credit?
On another note, any new news?
Nope, I'm pretty sure their AGI won't qualify them as well  so much for the 529 tax benefit! 
Ohh, I updated the last post - I think I had a chemical (no worries, I'm not upset at all! I'm making an appt today with my ob/gyn to get back on the progesterone, like I did with my pregnancy with Alex)
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| Posted 3/28/07 8:35 AM |
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nferrandi
too excited for words
Member since 10/05 18538 total posts
Name:
Nicole
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Re: 529 account question
Whoever writes the check gets the tax break. You can deposit only a certain amount each year tax free. If you are depositing the max, then have them send the check in their name so they can get the write off.
I think you can put $5000 per child with no problems. My parents deposit $10,000 into me and my sister's bank accounts and we write a $5000 check for her daughter and now DS.
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| Posted 3/28/07 9:14 AM |
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CookiePuss
Cake from Outer Space!
Member since 5/05 14021 total posts
Name:
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Re: 529 account question
Posted by nferrandi
Whoever writes the check gets the tax break. You can deposit only a certain amount each year tax free. If you are depositing the max, then have them send the check in their name so they can get the write off.
I think you can put $5000 per child with no problems. My parents deposit $10,000 into me and my sister's bank accounts and we write a $5000 check for her daughter and now DS.
The Pension Act of 2006 made the tax free distributions permanent as they were set to sunset in 2010 but it stipulates that only the owner of the 529 plan can use the tax credit and the contribution has to be made by them. You are no longer allowed to have anyone contribute and have the benefit of a credit.
None of the contributions are tax free; they have to be made with post tax funds. They will grow tax deferred and can be distributed according to code so that the growth is tax free.
A Coverdell account has contribution limitations but that is also post tax contributions. You are subject to phaseout for these accounts. You can contribute unlimited funds to a 529 plan.
As far as your parents, I think you are referring to the code on gifting. The gift tax exclusion for this year is $12k, anything over that required a gift tax return and you may have to apply it to your lifetime exclusion.
I hope this isn't overbearing and helps. 
Message edited 3/28/2007 9:35:11 AM.
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| Posted 3/28/07 9:34 AM |
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apb17
My guys
Member since 5/06 2173 total posts
Name:
Alli
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Re: 529 account question
They cannot write a check directly but they can write you a check and then you can write one out and send it directly.
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| Posted 3/28/07 10:08 AM |
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