5 Tips for Getting the Most Out of a 529 College Savings Plan

Vetta/Getty Images Apart from retirement, saving for college expenses is one of the longest-term goals that families set for their finances. After scrimping for years to build up your college savings, the last thing you want to do is make mistakes that will cost you when it comes time to make withdrawals. If you've used 529 plans to save for college, making the most of the available tax advantages is just part of the picture. Here are five tips for making the most of your 529 plan cash. 1. Spend Your 529 Plan Money on the Right Expenses You're allowed to get tax-free treatment on withdrawals for qualified higher education expenses. Those expenses include tuition, fees, books, supplies and equipment. If the student attends college at least half-time or more, room and board also qualifies -- but the amount is limited to a figure set by the school. So if the student lives off-campus, ask the school for its maximum. 2. Don't Waste Your Opportunities for Other Tax Credits Even if you have enough 529 plan money to cover every penny of your college expenses, you still might not want to withdraw the full amount you owe. That's because multiple tax breaks are available for college expenses, but you can only use each dollar of expenses for one benefit.