WebJan 24, 2024 · Superfunding a 529 plan requires two steps: Open and contribute a large lump sum of money to a 529 plan (up to five years’ worth of the gift tax exclusion … WebAug 1, 2024 · Superfunding 529s can be used to help get an estate under the threshold by removing a sizable chunk of assets from it. And while a gift of $160,000 may not fully cover the soaring cost of four years of college, families can use part of their lifetime gift and estate tax exemption 2 to make up the difference.
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WebFeb 25, 2024 · With 5-year gift tax averaging, also known as superfunding, each contributor to a 529 college savings plan can make a lump sum contribution of up to five times the annual gift tax exclusion. A couple can jointly give double this amount. WebFor example, the recommended annual contribution to a 529 plan is $16,000 per person because that's the current annual gift tax limit set by the IRS in 2024. With superfunding, … chris painting jacksonville
Superfunding a 529 — How to Pay for College
WebMay 26, 2024 · Superfunding, or 5-year gift-tax averaging, allows families to front-load large contributions to a 529 plan without having to pay gift taxes, while protecting their lifetime … WebMar 20, 2024 · Superfunding. If you have a substantial financial gift to make that surpasses the annual limit and your lifetime exemption, tax law allows you to superfund a 529 plan. Superfunding means breaking your contribution into five chunks that go into the account once annually. For example, if you make a superfund contribution for years 2024 through ... WebMar 24, 2016 · It is called superfunding the 529 account. Since the gift tax exclusion is personal and not shared between a married couple that means that they can contribute up to $140,000 at the time of the creation of the account. Better still, anyone can contribute or create a 529 account; grandparents, godparents, doting aunts and uncles included. geographical diversification in banking