529 expenses

[niccig]

We have a 529 account for DS. How do we get $$ from it. Is it similar to account like FSA, where you pay then get reimbursed? Or can you pay directly from the account? How do you prove it’s an educational expense? DS wants to do a program where he may need money for projects for equipment rental and other costs. We’d like to use the 529 for these costs too.

Thanks


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[o_mom]

We have a 529 account for DS. How do we get $$ from it. Is it similar to account like FSA, where you pay then get reimbursed? Or can you pay directly from the account? How do you prove it’s an educational expense? DS wants to do a program where he may need money for projects for equipment rental and other costs. We’d like to use the 529 for these costs too.

Thanks


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From our experience, you can request payments either to you or directly to the school. It is on you to keep track of the qualified expenses and show what it was used for, the 529 account will just report how much you took out. You should be able to request a payment ahead of the expense, as long as it is in the same year. There are certain rules around equipment where you have to show it was required for the class (other than a general you need a computer at school these days). We have tried to keep everything direct to the school, but we are not anticipating that we will probably need to pay out of pocket by the end, so it is "cleaner" to have the payment go direct so there is no question that it was qualified.

In your situation, I would probably plan to pay the general expenses (tuition, room, board) directly from the 529, just keep in mind it can take up to 2 weeks or so to get there. Then if you can afford to front the other expenses, pay and then request reimbursement. Just keep good records of what they are for, and you may want to have DS track that and consolidate to once or twice a semester.

[pinkmomagain]

We've had them send a check from the account directly to the university.

[Percycat]

For university expenses, we have the check issued directly to the school. For educational expenses, we use a separate credit card and get reimbursed from the 529. We also request reimbursment for scholarship payments.

[belovedgandp]

We've requested disbursements from the 529 to match scholarship funds and cover some direct expenses (like reimbursing computer purchase). These transfers go directly to DS checking/savings account to keep it cleaner.

[Zansu]

I have the funds transferred to me and I pay the university. It's easier for me to track where the funds are and when they're deposited.

[hillview]

https://www.savingforcollege.com/art...ith-a-529-plan
has what you can use the money for

most plans allow you to pay from your account and then move money from 529 to your account. Keep records in case there is an audit. My understanding is that audits are rare.

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[niccig]

From our experience, you can request payments either to you or directly to the school. It is on you to keep track of the qualified expenses and show what it was used for, the 529 account will just report how much you took out. You should be able to request a payment ahead of the expense, as long as it is in the same year. There are certain rules around equipment where you have to show it was required for the class (other than a general you need a computer at school these days). We have tried to keep everything direct to the school, but we are not anticipating that we will probably need to pay out of pocket by the end, so it is "cleaner" to have the payment go direct so there is no question that it was qualified.

In your situation, I would probably plan to pay the general expenses (tuition, room, board) directly from the 529, just keep in mind it can take up to 2 weeks or so to get there. Then if you can afford to front the other expenses, pay and then request reimbursement. Just keep good records of what they are for, and you may want to have DS track that and consolidate to once or twice a semester.

I think you’re right to pay the university directly for tuition and room/board, and then keep track of other expenses for reimbursement. The project DS will need to rent equipment is for a class so it should qualify under educational expense


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[niccig]

For university expenses, we have the check issued directly to the school. For educational expenses, we use a separate credit card and get reimbursed from the 529. We also request reimbursment for scholarship payments.

That’s a good idea to have a separate credit card so easier to track educational expenses


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[niccig]

We've requested disbursements from the 529 to match scholarship funds and cover some direct expenses (like reimbursing computer purchase). These transfers go directly to DS checking/savings account to keep it cleaner.

I was reading that having the money go to the beneficiary is simpler tjs go to parent and parent pays


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