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Child Tax Credit and a 529 Plan

| February 19, 2019

Child Tax Credit has doubled to $2,000 per qualifying child. Consider the Advantages for Funding the Future with the Increased Tax Refund.

Reduction of Future Debt: You may consider reinvesting the increased tax refund in a qualified 529 college savings plan. Investing in a child's education today, is an investment in their tomorrow because every dollar saved in a 529 plan can reduce future student debt.

Tax Planning: The Internal Revenue Service considers assets held in a 529 college savings plan as a completed gift. The contributions are therefore considered as the beneficiary's assets and NOT the account owner's.

Tax-Free Growth and Withdrawals: 529 college savings plan contributions and investment earnings may be withdrawn, and are free from federal income taxes if the money is used for Qualified Higher Education Expenses (QHEE).2

Account Control and Flexibility: The 529 college savings plan owner maintains complete control over account assets and is allowed to make beneficiary changes or even discontinue the account and take the money back.2

2 Non-qualified withdrawals from a 529 plan are subject to income tax and a possible 10% federal penalty on the earnings portion of the account.

Contact us today at 702-734-7000 if you should have any questions or if you're interested in learning more about a 529 college savings plan.

Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.