Cash In on Expiring Tax Breaks for Education Savings

Buy a computer or pay private K-through-12 tuition with pretax money while you still can.

Is your college student nagging you for a new computer? If you’d like to oblige but think you can’t afford to, you might be surprised to learn that you may have a ready stash of savings you can use to buy that gift -- if you have a 529 college-savings plan.

Normally, you must spend your 529 funds on college tuition and other qualified expenses. The earnings portion of distributions not used for qualified college expenses is taxed and slapped with a 10% penalty.

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