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If you have helped children or grandchildren with college costs, you are probably already familiar with 529 plans — the tax-advantaged education savings accounts offered by states and educational institutions.

There’s no federal tax deduction for 529s, but residents can usually get a state tax deduction on contributions made to their own state’s plan.

Furthermore, the money grows tax-free over the years until you take it out, tax-free, to use for a child’s tuition, books, room and board, and other qualified educational expenses.

Works for any age student

But you may not realize the plans also can serve a different purpose — to fund your own education. If you are a lifelong learner, you can set up a 529 plan for yourself to pay for your educational pursuits.

You get the same tax breaks and benefits as any 529 plan owner. You can fund the account with new money or with unused money from a child’s account. Any leftover money in your 529 that you don’t use can go to the 529 of a child or grandchild.

Joe Hurley, 62, of Victor, N.Y., used about $5,000 saved in his 529 plan to study horticulture and conservation at Finger Lakes Community College. “I don’t think a lot of people know you can do one just for yourself,” he said. “It sounds almost too good to be true.”

Hurley, who is a former accountant and founder of Savingforcollege.com, a college finance research website, learned about a personal 529 after setting up plans for his two children in the early 1990s. He sold the website in 2012 and now runs a farm.

Karen Austin, deputy treasurer for the state of Iowa, set up a 529 for herself in 2012 to help pay for her MBA from the University of Iowa. By the time she finished her degree, Austin deducted nearly $9,000 over three years from her state income taxes. She says her only regret is not saving money in a 529 sooner.

Shop around

To set up your own 529, do some shopping first. Find details on different state plans at savingforcollege.com.

Most states (including Maryland, Virginia and the District of Columbia) offer residents a state income tax break for contributing to their own state’s plan.

Virginia taxpayers can deduct up to $4,000 per account per year on state taxes. In Maryland, individuals may deduct up to $2,500 per beneficiary per year. Married couples may deduct up to $5,000 per beneficiary per year.

Contributions to the D.C. College Savings Plan by D.C. residents may be deducted up to $4,000 per year by an individual, and up to $8,000 per year by married taxpayers who each make contributions to their own account.

You can choose a plan in another state, which could be a smart move if your state doesn’t offer deductions and another state’s plan offers better investing options or lower fees. You also can research and compare plans at the website of the College Savings Plans Network (collegesavings.org).

If you decided only recently to go back to school, you won’t have time to let your 529 contributions grow. But most states (including Md., Va., and D.C.) allow for immediate 529 withdrawals, according to Mark Kantrowitz, publisher for Savingforcollege.com. You can set up a plan one day, take money out the next day and still qualify for a state tax deduction that same year.

Know the rules

You may be tempted to use the money to take a trip advertised as an educational tour, but it likely won’t count as a qualified plan expense, Hurley warned.

Continuing education or certification courses count, so you could use a 529 for those. Be sure any course you take is offered by an eligible educational institution, and use the money only to pay tuition and other eligible expenses. Otherwise, you could face a 10% tax penalty and income taxes on the account’s earnings, and you also may have to pay back your state tax deduction.

Going back to school may make you eligible for the federal Lifetime Learning tax credit, which is worth 20% of the first $10,000 in tuition you pay per year, for a maximum credit of $2,000.

But you can’t double dip on tax breaks, Kantrowitz pointed out. You can’t use the same educational expenses to justify both the tax credit and the tax-free withdrawal from a 529. You’d owe income tax on the earnings withdrawn from your 529, though the 10% penalty would be waived.

To avoid the tax hit, use 529 money only after you exceed the limit of the expenses covered by the tax credit.

© 2019 The Kiplinger Washington Editors. Distributed by Tribune Content Agency, LLC.