I think my confusion around the 529 being deductible is because it is deductible in our state. I am researching schools and financial aid, while my husband does the taxes. He had mentioned putting more into the 529 to maximize a deduction, but I assumed it was a federal deduction like a retirement account. Now that I know it isn’t, it helps clarify the value of that strategy.
We aren’t trying to hide money or get away with anything, just trying to make sure our surprise windfall is allocated in the most advantageous way.