THUMBS UP: Federal Tax Breaks Make 529 College Savings Plans a Hot Item, Again

Physician's Money DigestMay 2007
Volume 14
Issue 5

Wall Street Journal

Now that 529 plans are a permanentfederal tax break they've regained theirpopularity, and states and plan managersare offering or increasing investmentincentives, according to a recentarticle. However,physician-investors should keep in mindthe following key points to reduce plancosts and increase tax breaks:

1) For the lowest expenses, considerinvesting in a direct-sold plan.

2) Second, invest in an in-state planif your state offers tax breaks to residentsand the expenses don't outweighthe tax advantages.

3) Remember to contribute beforeyear-end to qualify for a 2007 state taxdeduction. Some states, like Pennsylvania,are sweetening the tax breaks byallowing residents to take a state taxdeduction for any state's 529 plan. And,Pennsylvania also eliminated premiumson its prepaid plan.

To compare the variety of 529 plans,visit

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