529 plans, or Qualified Tuition Programs as the federal government calls them, are specialized investment accounts which provide tax-advantaged savings for education expenses. 529 plans are typically the best vehicle to save for college or up to $10,000 annually for elementary or secondary school tuition.
Contributions to a Virginia 529 plan offer the account owner a Virginia state tax deduction. Then, distributions to reimburse for any qualified education expenses are distributed both state and federal tax-free.
Our guide “How to Claim Your Virginia State Tax 529 Contribution Deduction” can assist you with obtaining a state tax deduction for contributions made to your account, including contributions made by someone other than the account owner.
In order to perform that filing, you need accurate records of how much you contributed to the account for a given tax year, and that information can be found on your annual year end statement. Here’s how you download that:
Start by logging into your American Funds online account.
On the left side of the home page, click on “Statements & Tax Forms”.
The page that loads shows account statements and tax forms for the most recent tax year. To download your year end statement, make sure the applicable tax year is selected next to the “Statements & Tax Forms” heading. Then, select the “Q4-December 31, 20XX” link under the large “Quarterly Statements – 20XX” heading. This will open a new tab where you can view the statement. To download the statement, click the arrow pointing down in the black banner on the right side of the page.
Once it is downloaded, you can open the statement to find a summary of the total Year-to-date Additions for all accounts on the first page in the “Portfolio value of all accounts” table.
The total Year-to-date Additions for each of your 529 accounts is the amount you or your tax preparer will need in order to claim your state tax 529 contribution deduction.
If you are looking for additional details, the year end statement also includes a ledger of all contributions made to the account during the applicable time period.
The “Statements & Tax Forms” page also includes a search for “Looking for an account balance statement?” which can be used to “download an official statement that verifies the value of your account on any date.”
As for tax forms, American Funds will only generate a 1099-Q if you have taken a distribution from the 529 plan during the tax year. If you have not taken a distribution, then no 1099-Q will be generated for that plan.
If a 1099-Q is generated, the individual noted as the recipient is most likely the account holder, but you may have one generated for the beneficiary instead or as well depending on where the funds were distributed throughout the year. For more information on this, you can read “Q&A: Who Pays Taxes and Penalties on 529 Distributions and How?”
If you have any questions, the American Funds customer service team for existing and prospective investors can be reached by phone at 800-421-4225. Their hours are advertised on their “Connect with us” page as 8:00 a.m. to 7:00 p.m. ET, Monday through Friday.
Photo by Vitaly Gariev on Unsplash. Image has been cropped.
