Tax-free withdrawals for qualified education expenses

Tax-free withdrawals for qualified education expenses refer to taking money from certain savings plans, like 529 plans, without paying taxes on the amount withdrawn. These plans are designed specifically for education costs such as tuition, books, supplies, and certain room and board expenses. When the money is used for qualified education expenses, the withdrawal isn't taxed, making it a tax-efficient way to save and pay for education. However, if the money is used for non-qualified expenses, the withdrawal may be subject to taxes and penalties.