How to pay for a child’s education can cause a lot of stress on a parent. Having a little bit of knowledge and time can reduce a lot of that stress.
Each state has their own 529 Plans, which are tax deferred plans designed for saving for education. And while there may be tax advantages to opening a 529 Plan sponsored by your home state, you are not required to use your state’s 529 plan. The biggest consideration is the costs associated with each state’s 529 plan.
Not only are these plans tax deferred (your not taxed while funds are in the account), but the money can be used tax free (as long as it is used as tuition for qualifying educational institutions).