New Bill for Tax-free 529 Plan Withdrawals

Physician's Money Digest, November 2005, Volume 12, Issue 15


If Benjamin Franklin were alive in 2005,he would have to amend his famous quote"Nothing in life is certain except death andtaxes" to include rising education costs.With the average bill for a year's tuition atUS private colleges expected to reachalmost $50,000 in 2015, the cost for highereducation just keeps getting higher. Fortunately,there might be some relief in sightfor physician-parents when it comes to savingon taxes. If participating states andsponsors have their way, 529 college savingsplan withdrawals will remain taxexempt for good. Right now the federalexemption is set to expire on Dec. 31, 2010.In May, members of the House Ways andMeans Committee introduced a bill thatwould make 529 withdrawals permanentlytax-free. According to , thebill received widespread support from bothfinancial advisors and states that sponsorthe plans. It will be some time, however,before a vote on the bill occurs.