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  • 529 state deduction max

    Mrs. Brains428 is expecting (10 weeks!). I first want a healthy baby. Secondly, I'd like to put that child in a better financial position than I was. So, 529.

    The Missouri max deduction for 529s is 16k/yr for MFJ (8k if single). However, she also has a child from a previous marriage who we haven't saved for (his father is military and says he will give him the GI bill, but that's not in writing in divorce papers, so there is no guarantee). I was wondering if you can double the state tax deduction if you open 2 accounts. My guess is the answer is, "No." But I know there are other Missourians here who may know the answer to this question.

    The plan is to fund the account well enough to definitely pay for state school in full (a little over 100k for 4 years at Mizzou including room and board). It's more of a tax question, but maybe that information will bring information about planning this that I haven't thought about.

  • #2
    I believe the state deduction is $16k total, not per beneficiary.

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    • #3
      That is correct, you can deduct up to $8k/spouse. Only contributions made by the owner or owner's spouse are deductible. Since it is a "per person" deduction, there is nothing to keep grandparents from doing the same as long as they open the account in one of their names. Congratulations!
      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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      • #4
        To clarify, 529 deductions are only at the state level, correct? We do not deduct them at the federal level?

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        • #5
          Originally posted by livtex View Post
          To clarify, 529 deductions are only at the state level, correct? We do not deduct them at the federal level?
          Some states at that.

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          • #6
            What state do you live in?

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            • #7
              Originally posted by livtex View Post
              To clarify, 529 deductions are only at the state level, correct? We do not deduct them at the federal level?
              The contribution is tax deductible only at the state level in select states. The growth is tax free at the state and federal level.

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