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As the whirlwind of the holidays takes you to the end of the year, don’t forget to make your end-of-year contribution to CollegeAdvantage, Ohio’s 529 Plan.
There are tax benefits for saving for college in a CollegeAdvantage 529 Plan: tax-free earning so you can use all the funds accumulated in your account; tax-free withdrawals for qualified higher education expenses; and Ohioans can deduct up to $2,000 per person (or married couple) of your 529 plan contributions, per beneficiary, per calendar year, from your state taxable income.
However, you can always contribute even more! Contributions over $2,000 per beneficiary, per calendar year, may be carried forward to deduct from future tax years until all of your contributions are fully deducted. Please keep in mind that for the state tax deduction, you will need to have copies of your bank statements or cashed checks to show for verification. Statements from CollegeAdvantage are not acceptable as they contain contributions from all sources, not just the account owner.
Your new 529 contributions must be received in good order before 4 p.m. ET Friday, Dec. 29, 2017, to be included in this year’s total.
If you’ve asked loved ones to give a gift towards a college education by contributing to your child’s Ohio’s 529 Plan, then if they are Ohioans, they are also eligible to deduct their gift contribution from their state taxable income. If your family members are able to give significantly, they can invest up to $14,000 ($28,000 for married couples) per beneficiary without incurring any federal gift-tax consequences. They can even contribute up to $70,000 per beneficiary in a single year ($140,000 for married couples) and take advantage of five years’ worth of tax-free gifts at one time. For more information, have them consult their tax adviser or estate-planning attorney.
College may be far away but the Ohio tax deadline is not. Explore the simple, tax-free way to save for college, nationwide. And remember: Dec. 29, 2017, is the last day to give the gift of college savings through CollegeAdvantage.
Posted on December 28, 2017