You may also prefer to pay college expenses first out of your highest growth account to maximize federal tax benefits and to encourage gift contributions from friends and family. For example, an older child’s account could be more conservatively invested to help protect your contributions as they near college, whereas a younger child’s account might be invested to balance growth and income strategies during a longer time frame. You might do this to align investment strategies with the time frame each child will begin using the funds. You could open a different account for each child. There’s no cost associated with opening an MESP account or owning more than one account. Apprenticeship programs must be registered and certified with the Secretary of Labor under the National Apprenticeship Act. You should talk to a qualified professional about how tax provisions affect your circumstances. For Michigan taxpayers, these withdrawals are subject to recapture of tax deduction, state income tax as well as penalties. 1Withdrawals for tuition expenses at a public, private or religious elementary, middle or high school, registered apprenticeship programs and student loans can be withdrawn free from federal taxes.So, if your child changes their mind down the road, your account will still be available. Or you can always wait because the funds never expire, and often the choice to go to school is a delayed decision.See the Program Description for more information and exceptions. If funds are withdrawn for a purpose other than qualified higher education expenses, the earnings portion of the withdrawal is subject to federal and state taxes plus a 10% additional federal tax on earnings (known as the “Additional Tax”). If you just want the money back, you can withdraw the funds at any time.You can transfer the funds to another eligible beneficiary, such as another child, a grandchild or yourself.Up to $10,000 annually can be used toward K-12 tuition (per student).Your 529 can be used for student loan repayment up to $10,000 lifetime limit per individual.Your funds can be used to pay for a variety of eligible education expenses, including at any accredited college, university, apprenticeships, community college or postgraduate program in the United States-and even some schools abroad.You’ll always have access to several options for this money: With your MESP account, you’re never locked in.
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