Summer Savings Strategies With A Sales Tax Holiday And More
With hot days and a new school year fast approaching, now is the perfect time to review your 529 college savings account and your saving strategies. Ohio’s 529 Plan, CollegeAdvantage, can help you check your progress with online calculators and tools. Use them to verify that you’re on track to reach your college savings goals and to see what would happen if you changed your savings strategy by increasing your 529 contributions. Need ideas on how to boost those contributions? Here are some steps you can take this summer to further fund your 529 account.
Save With Ohio’s Sales Tax Holiday
The State of Ohio sponsors a sales tax holiday to reduce resident’s expenses for the upcoming school year. If you shop during this selected weekend (and back-to-schools sales) to take advantage of the extra savings, deposit your savings into your child’s 529 plan to continue supporting their future higher education.
Ohio’s 2018 sales tax holiday weekend starts at 12:01 a.m. Friday, Aug. 3, and ends at 11:59 p.m. Sunday, Aug. 5. School supplies priced at $20 per item or less; school instructional material at $20 per item or less; and clothing priced at $75 per item or less are all exempt from sales and use tax.
According to the Ohio Department of Taxation, school instructional materials are reference books, reference maps and globes, textbooks and workbooks. The following items are considered school supplies: binders; book bags; calculators; cellophane tape; blackboard chalk; compasses; composition books; crayons; erasers; folders; glue, paste, and paste sticks; highlighters; index cards; index card boxes; legal pads; lunch boxes; markers; notebooks; paper; loose leaf ruled notebook paper, copy paper, graph paper, tracing paper, manila paper, colored paper, poster board, and construction paper; pencil boxes and other school supply boxes; pencil sharpeners; pencils; pens; protractors; rulers; scissors; and writing tablets.
If you have any additional questions about the sales tax holiday, the Ohio Department of Taxation has answers on their FAQ page.
Save With Disappearing Expenses
Did you send your kids off to camp this summer? Or did they attend day camps near to home? Those camp costs are disappearing expenses, items that are temporarily part of your family’s budget. Another example of a large disappearing expense for families is preschool. Once school starts, you can turn your former preschool, day care, or summer camp costs into regular contributions to your 529 account. Do this and you can support your child’s educational needs for the future.
Other disappearing expenses can include car loans, medical or dental bills, credit card debt, or, perhaps more relevant, your own student loan payments. Once you have paid off these obligations, re-direct those dollars to your child’s 529 plan. As these costs are already in your household’s budget, there is no loss of income with changing them into 529 contributions.
Save With Automatic Contributions
Streamline your 529 savings with automatic recurring contributions. Rather than waiting to see how much money you can transfer to a 529 account at the end of a paycheck cycle, pay yourself and your child’s future higher education first. These automated deposits can be set according to your paydays or a monthly contribution schedule. The 529 savings add up even when depositing a minimum amount.
Some employers also offer payroll deduction, where a portion of your paycheck is deposited directly into your CollegeAdvantage Direct 529 account. Login to your account to establish payroll deduction through direct deposit or complete and mail a payroll deduction form. Payroll contributions makes it easy to save regularly to meet college-saving goals.
Save With Upromise
Ohio’s 529 Plan has partnered with Upromise* to help you save even more for your child’s higher education costs while shopping as you normally would. Upromise is a free rewards program that offers its members cash back as you shop online, dine out, and more. Participating businesses include online retail stores and more than 10,000 restaurants.
Once your Upromise account is linked to your CollegeAdvantage Direct Plan, you can transfer your Upromise earnings to your 529 account, subject to a $25 minimum.
Save With Loved Ones’ Contributions
When friends and family ask what to give for a celebration in your child’s life, ask them for the gift of college with a contribution to your child’s 529 plan. With Ugift, it’s simple for anyone to contribute to your CollegeAdvantage Direct Plan account. Log in to your 529 account and click on Ugift to receive a unique code for your account. This code permits others to make online contributions to your CollegeAdvantage Direct 529 plan account without needing the actual account number. Once you provide friends and family the Ugift code, they can visit Ugift529.com to make their electronic contribution securely from their bank account. The gift giver can make one-time or recurring electronic contributions at any time, and if they are an Ohio taxpayer, they can deduct their contributions up to $4,000 from their Ohio taxable income.
It's Never Too Late To Start Saving
If you haven’t started to save for college costs, it’s never too late to open an Ohio’s 529 Plan. Every dollar saved is a dollar that isn’t borrowed, which makes a 529 college savings plan an excellent alternative to student loan debt. Even small 529 plan deposits can grow through the power of compound interest, tax-free earnings, and tax-free withdrawals for qualified higher education expenses. If you have been saving in a 529 plan, take these additional steps and watch how your account grows!
* Upromise is an optional service offered by Upromise, Inc., as an added value to CollegeAdvantage Direct 529 Plan Account Owners. Upromise is separate from the CollegeAdvantage Direct 529 Plan and is not affiliated with the Ohio Tuition Trust Authority of the State of Ohio. Participation in Upromise is optional and voluntary. Specific terms and conditions apply. Participating companies, contribution levels, terms, and conditions are subject to change without notice. Upromise and the Upromise logo are registered service marks of Upromise, Inc.
Posted on July 23, 2018