May is full of wonderful celebrations – May The 4th (Star Wars Day), Cinco de Mayo, Free Comic Book Day, National Teacher Appreciation Week, National Military Spouse Appreciation Day, Mother’s Day, Memorial Day, and oh so many graduations.
On May 29, the college savings industry celebrates 529 Day. 529 Day is a day to spread the word about the importance of saving the tax-advantaged way for your child’s higher education. For almost 30 years, Ohio’s 529 Plan, CollegeAdvantage, has helped families across the nation save for whatever school comes after high school.
If you are unfamiliar with them, here’s how Ohio’s 529 Plan make saving for higher education simple.
Tax benefits of saving in Ohio’s 529 Plan
With Ohio’s 529 Plan, you can maximize your savings with 529 tax benefits, which include:
- Tax-free earnings so all investment growth is yours to use. Compound interest — the interest earned on contributions, earnings, and interest already accumulated in the 529 account — is included in the tax-free earnings. Tax-free growth can really add up in a 529 savings plan;
- Tax-free withdrawals for qualified higher education expenses, which are those required costs for attendance at the school. These expenses include tuition; room and board (on and off campus) when the beneficiary is enrolled at least half-time; mandatory fees; computer equipment and related technology as well as internet services; books, supplies and equipment related to enrollment and classes; and certain expenses for a special-needs student; and
- State of Ohio income tax deduction for any Ohioan who contributes to a CollegeAdvantage 529 account. The state tax deduction is up to $4,000 per year, per beneficiary. With unlimited carry forward, you can continue to subtract 529 contributions from your state income tax in future years until all contributions have been deducted. Any loved ones who are Ohio residents can also take this deduction if they contribute to your child’s Ohio 529 account.
Ohio’s 529 Plan can be used nationwide
While you may have saved in Ohio’s 529 Plan, you can use your funds at both Ohio schools and schools nationwide. 529 plans can be used across the United States at any accredited post-secondary school that accepts federal financial aid, which includes two-year, four-year, and graduate programs, as well as vocational or trade schools. You can check with Federal Student Aid (FAFSA) to see if the school has a Federal School Code. If it does, then you can use your 529 plan there.
Tools and calculators to shape your Ohio 529
If you’re not sure how much to save for future higher education expenses or just want to crunch some numbers, CollegeAdvantage has the tools and calculators for you. The College Savings Estimator can help set your savings goals. If you’ve currently using a bank account to save for a higher education, the Tax Benefit Tool will show how the tax-free growth in a 529 plan really adds up. The Cost of Delaying Savings Tool illustrates how saving early combined with compound interest grows the 529 account.
Ohio’s 529 Plan is the tax-free way to help pay for college nationwide. So start saving for your child’s higher education today! For someday your child is going to college. Someday starts with Ohio’s 529 Plan, CollegeAdvantage.com.