To set up a 529 account, find the 529 account entry under the Household group of inputs. If it does not appear there, look below on that Household page and "restore" it if it was dismissed earlier. 

  1. Enter the description, for example: "Toby's College costs"
  2. Enter any existing balances you had to begin the current year
  3. Enter next the withdraw amounts in the year you will need them. For example, $15,000 four years in a row starting 10 years from now. 

Note that the 529 Accounts report will require that the full four years (if that's what you enter) will need to be funded by the beginning of the first year of that four-year 529 account. It will not allow you to continue to fund a particular 529 account during the period of years you are withdrawing.

Note that you don't enter your annual contributions themselves. You enter withdraw goals and the annual contributions are calculated for you.  So if you want to provide $15,000 for your student for each of four years in some future dates, you enter those future withdraw amounts. Then the 529 Account report will show you the annual contributions required to meet that goal given your time frame and earnings rate on the 529 Account (which is set independently of other earnings rates). The contributions needed will show up in the 529 Account report (and also in the Spending Overview report in the "Other" column). Of course if you have a dollar target in mind of what you want to contribute each year, you can back into that amount with just a little trial and error by changing the withdraw goals.

For example, if you have $20,000 saved to use 5 years from now as existing 529 balance and don't want to add to that balance, you would enter the $20,000 as existing balance and the $20,000 as a future qualified withdraw (or, say, $10,000 for two years, etc.). 

When you withdraw those funds in the year you make the qualified withdraws, they show up as special receipts (Income Overview report) but also as special expenses (Spending Overview report) in the same amount. The assumption is that you receive those funds (withdraw from the 529) but you send them back out the door in the same amount in the same year for tuition etc. 

Be careful you don't double count your education expenses if you set them up as 529 by also creating special expenses to represent those same costs. If you are using the 529, any special expenses earmarked as "education" not entered in the 529 set up will not have the tax advantage of the 529 and they will be in addition to the the 529 withdraw/expense as described above. 


See also: How do you handle tax advantages of 529 plans?