Looking to fund your child’s college education tax-efficiently? Discover how a 529 Plan can help you grow investments tax-free in 2025. Check below and Start maximizing your savings NOW!
What Is a 529 Plan?
A 529 Plan is a tax-advantaged savings plan for education expenses. Investments grow tax-free when used for tuition, books, housing, and more. While contributions aren’t federally deductible, many states offer state income tax incentives.
2025 Contribution Limits
Updated lifetime contribution caps for 2025:
- Arizona: $545,000
- California: $535,000
- Michigan, Maine, Washington DC, South Carolina: $510,000
- North Dakota: $275,000
- Georgia & Mississippi: $240,000
Gift Tax Considerations
Contributions are considered gifts. In 2025, the annual exclusion is $18,000 per donor per beneficiary. Exceeding this requires a gift tax return.
What Is Superfunding?
Superfunding allows a lump-sum contribution of up to $90,000 ($180,000 for couples) under the 5-year gift tax exclusion rule. Ideal for maximizing early growth in a tax-free environment.
529 Plan vs. ESA
Coverdell ESAs have lower limits and income restrictions. A 529 Plan offers broader flexibility and higher contribution ceilings, making it a better fit for most families.
Who Should Use a 529 Plan?
- Parents planning long-term education costs
- High-income earners seeking tax advantages
- Grandparents contributing to legacy planning
- Families funding private K-12 education
Final Tip
Start early and contribute consistently. A 529 Plan is a powerful tool for tax-free growth and college funding in 2025.
