Do you want to donate to your grandson’s 529 college plan but are confused by the gift-tax limit? Well no fear...you can give up to $13,000 a year...and then a bit more.

The rule on gift-tax limits is that any contributions up to $13,000 per person (or $26,000 for those who are married filing jointly) each year is exempt from federal taxes. Anything contributed above that amount will be considered as a taxable gift and will have to be reported on your annual gift tax return.

There is a loophole for 529s though, in case you do donate more than the yearly limit. You can average one contribution amount over a five-year period. Let’s say you make an $18,000 contribution one year to your grandson's 529 college plan. Normally the extra $5,000 would have to be reported on your tax returns. However, an alternate option would be to have the $18,000 divided and applied to the account over a span of 5 years instead of all in one year. This means that only $3,600 will be contributed each year. This also means that you have room to add up to $9,400 for each year too.

The rules around 529s and gift-tax laws can be confusing. You don't have to go it alone. Try talking to our community about your questions. Help is just one click away.