The value of a college degree, in dollars and sense, is indisputable. College graduates earn twice as much as those with only a high school diploma. They are less likely to find themselves unemployed. They are more likely to own a home. They are more likely to marry (which, statistics show, means they will live longer).
At the same time, college debt in America recently topped $1 trillion. The time to save is now. The way to save is with a 529 plan.
What is a 529 Plan? 529 College Savings Plans are state-sponsored accounts used to save for the costs of education (tuition, room and board, mandatory fees, textbooks, computers, etc.).
Are there different options? Yes! There are pre-paid tuition plans and college savings plans. With a college savings plan, you create an education fund based on financial investments, such as mutual funds. With a prepaid tuition plan, you pay tuition now for use later.
Why should I start a 529? #1: They’re tax-free–both as you contribute and upon withdrawal. #2: Some states offer tax deductions or tax credits for income contributed to a 529.
Am I eligible? Do you pay taxes in the U.S.? Then yes!
What else do I need to know? 529 accounts are not subject to federal tax, and in some states they’re exempt from state tax, as well. Your income level can affect the net value of a 529, so it’s important that you weigh all options before you jump in.
There are several types of 529 accounts, and like many government benefits, navigating the values of each can be difficult. Visit us online or give us a call at (603) 833-3260 to learn more about how you can start saving today for your own or your child’s future.
Tax Tips for the Self-Employed
An Overview of the Net Operating Loss Tax Provisions in the CARES Act
How To Decrease Your Small Business Debt? A Step-By-Step Guide
Why Every Small Business Needs a Bookkeeper?
Tax Credits That Could Benefit Small Businesses
Why You Should, and Shouldn’t, Apply for a Tax Extension