What may you NOT spend your 529 funds on?
Examples of expenses for which the 529 account funds should not be used include: transportation, car or health insurance, or Spring break trips. No phone plans or fitness club memberships. No other friends’ alcohol or food. Federal law provides that your account cannot be used as collateral for a loan by the owner or the beneficiary.
Tyson wants to join the Spring break crowd in their condo, but it will cost him $500 for the weekend. He is tempted to use 529 money, but knows that would be non-qualified expenses and should be reported on taxes at year end.
No statement or example on this site should be considered a specific recommendation for your personal situation. Investing and tax strategies each carry significant risks. Examples herein may not apply to your situation. Please consult your estate attorney, tax advisor, or financial advisor for personal advice.