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Article:
College Savings Plans '“ are they the best choice for my child? by: Vanessa McHooley College Savings Plans '“ are they the best choice for my child? College Savings Plans, also called Section 529 plans, are one of the best ways to save for college because they offer: Tax advantages A variety of investment options Flexible contribution options Parental control Little impact on eligibility for need-based financial aid Tax advantages Investments in 529 plans are usually exempt from federal taxes. Earnings are tax-deferred and are not subject to capital gains taxes. Redemptions are also exempt from federal income tax if they are used to pay for tuition, room and board, fees, books, supplies, or equipment. Most states also offer tax advantages, at least if you enroll in the plan for your own state. In addition, contributions may be deductible on your state income tax. In addition to these income tax benefits, College Savings plans can be a valuable estate planning tool. The accelerated gift option allows you to average gifts over $'11
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