Summer Savings Strategies Include Ohio Sales Tax Holiday
Summer is the perfect time to review your 529 college savings account and saving strategies before the new school year starts. Ohio’s 529 Plan, CollegeAdvantage, has online calculators and tools for you to verify that you’re on track to reach your college savings goals and to see what would happen if you increased 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
Have you looked at your child’s upcoming school year supply list? Does it seem to go on and on? The state of Ohio wants to help out with a sales tax holiday weekend. If you shop during this weekend and take advantage of the back-to-schools sales during the sales tax weekend, deposit your extra savings into your child’s 529 plan to continue supporting their future higher education.
Ohio’s 2019 sales tax holiday weekend will start at midnight Friday, Aug. 2, and ends at 11:59 p.m. Sunday, Aug. 4. 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 your kids head off to camp — whether a day, sporting conditioning, STEM or art — this summer? These camp costs are disappearing expenses, items that are temporarily part of your family’s budget. Another large disappearing expense for families is preschool. Once your child starts all-day kindergarten or first grade, you can turn the former preschool, day care, or summer camp costs into regular contributions to your 529 account. This way, you are continuing to 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
Build up your 529 savings with automatic recurring contributions. This way, you can pay yourself and then your child’s future higher education first, rather than trying to set aside some dollars to contribute near the end of the pay cycle. Most account owners say it’s easier to set up the automatic contributions and then forget it. You can set these automated deposits according to your paydays or a monthly contribution schedule. The 529 savings add up even when depositing a small amount.
Some employers also offer payroll direct deposit, where a portion of your after-tax paycheck is deposited directly into your CollegeAdvantage Direct 529 account. To learn more about setting up payroll direct deposit, this article will guide you through the simple steps to take. 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 for your child’s higher education costs while shopping. Upromise is a free rewards program that offers its members cash back as you shop online, dine out, buy groceries, and book flights and hotels. 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
Family and friends want to commemorate the big events in your child’s life. If they ask for gift ideas, tell them that they can help with the next big milestone in your child’s life – their higher education —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 529 plan without needing the actual account number. Once they have the Ugift code, friends and family 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 interests, tax-free earning, 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!
Someday your child is going to college. Someday starts today with Ohio’s 529 Plan, CollegeAdvantage.
* 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, 2019