Be careful when withdrawing money from 529 plan

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529 plans can provide big tax breaks when depositing money into a college savings account. But what happens when it's time to take the money out? Withdrawing money from the plan can be complicated, and there are rules to follow if you want to avoid hefty penalties."If you don't spend the money on legitimate 529 expenses, you'll pay income tax on the earnings in the 529 and a 10 percent penalty on the amount you saved," said Donna Rosato, of Consumer Reports.Legitimate 529 expenses include tuition and supplies, such as books and computers.Money can also be used toward room and board if the stud...

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