Latest / The College Savings Podcast with Fexingo: 529 Plans, Education Funding, and Student Costs
The Kiddie Tax Trap in 529 Plan Withdrawals
Lucas and Luna unpack the little-known 'kiddie tax' rule that can turn a 529 plan withdrawal into a surprise tax bill when the beneficiary has unearned income. They walk through the IRS threshold for 2025 ($2,600), explain how the Tax Cuts and Jobs Act changed the rules, and share a real-family scenario where a student's summer internship plus a 529 distribution triggered the tax. The episode also covers the 'parental election' loophole that can save families thousands, and ends with a practical checklist for financial advisors and parents before the first withdrawal…
The skinny
The skinny isn't ready yet — notes appear once the transcript is processed.