I am wondering if I can use tax free money to pay for tuition, books, and the biggie…living expenses. Since I have a family and mortgage etc. the living expenses will obviously be large. The buyout is equal to two years pay and I would like to take advantage of tax breaks with the lump sum payment. Thank you.
I am taking a buyout at work. Can I put a portion of the $ into a 529 plan tax free?
23
Jun
FaxMan
June 23, 2012 at 3:30 pm
No. Money going into a 529 plan is after-tax dollars. However, depending on what sate you reside in, and the state the 529 plan belongs to, you could get a deduction from your state taxes. Also, the money in the 529 will grow tax free and will also be tax free once withdrawn if used for eligible college expenses.