Quote:
Originally Posted by jIM_Ohio
I am looking for a way for the contributions to be pre-tax, if at all possible.
If I get a deduction NOW, I am more likely to do it. If I am restricted how the money is spent later, I want a deduction now. If there are fewer restrictions on back end (no 10% penalties), then I could contribute post tax.
But why contribute post tax to pay a 10% penalty (that money was already taxed) if education is not in the cards for the child?
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Good question. That's why I wouldn't recommend funding a child's education 100% with a 529 or Coverdell. I plan on funding 1/3 to 1/2. In the small chance that one of my children doesn't go to college, I can transfer it to the other child. If both don't go to college, then at least I've limited the damage of the penalty.
If you find a good pre-tax way to save for college, please let me know.
