Question

Which three expenses could money invested in a 529 plan be used for without penalty?

clothes
gas
gym membership
room and board
textbooks
tuition

Answer 1

room and board, textbooks, tuition

Step-by-step explanation:

A 529 plan is one that has a tax advantage and is designed as a savings account for college students.

There are various items it can be used to purchase without attracting tax payments. These include education related expenses such as: room and board, textbooks, tuition. They are called qualified expenses.

Unqualified expenses are those that are not covered by the 529 plan. They attract tax payment and include: extracurricular activities, application and testing fees, transportation costs, and health insurance.

So gym membership, clothes, and gas are not qualified expense under the 529 plan.