By Ross Loehr, Business Development Officer, Intuition College Savings Solutions
April 16, 2019
Here we are on the other side of another tax filing deadline! What a great feeling to know that there are 364 days until tax returns are due again. Even more exciting, is that this year’s tax season started what I hope will become an ongoing family tradition.
After spending hours working through our federal tax forms, I apprehensively approached the moment of truth. Would we be due a refund or end up owing Uncle Sam? I was elated to see that we would be receiving a refund of $301.73. How should I spend this new fortune?
I started considering fun ways to spend the refund but was interrupted by my young daughter, who came bouncing into the room and asked if I would read her a story. As we turned the pages of her favorite book, I thought about how quickly she is growing up. I realized that college will arrive before I know it, and so will the expenses. My blood pressure started rising at the thought of it! I have long believed that any contributions to her 529 account are an investment in her future. While paying all her college expenses is most likely out of reach, my wife and I do contribute monthly to her 529 account. It is important to us that she has help with college costs. After all, every penny saved is one less penny of debt for her education. That evening $301.73 was electronically transferred to her 529 account.
The next day I was telling my parents about our “tax windfall” and the process of directing our tax return to my daughter’s 529 account as a complement to our normal contributions. They thought it was a great idea and mentioned that they had received a tax refund as well. My dad offered to match the contribution we had made. “Would you send that email link?” my mom asked. “It’s so much easier than sending a check like we used to do for your college savings account!”
The process for contributing to a 529 account certainly has been simplified over the years. Many 529 plans offer gifting portals with user-friendly email notifications and contributions can be made online in real time. The streamlined process has made it easier to encourage friends and relatives to make college savings contributions for holidays and birthdays rather than buying another toy or game that children will inevitably outgrow. The value and advantages of an education will also last a lifetime.
Several minutes after the conversation with my parents, I created a “Happy Tax Day” gift event, and they completed the steps to deposit an additional $301.73 into my daughter’s 529 account. This matched our tax refund to provide an overall contribution of $603.46. These periodic lump sum contributions, along with the regularly scheduled deposits we make, will support our daughter’s future pursuit of a higher education. Now I’m hoping we can make this Tax Day match an annual family tradition!
About the Author
Ross Loehr is the Business Development Officer at Intuition College Savings Solutions (“ICSS”). For the last 30 years, ICSS has offered plan management solutions to the 529 industry. ICSS currently services ten 529 plans across eight states and administers over one million participant accounts. Visit www.intuitioncss.com or contact Ross at Ross.Loehr@intuitioncss.com for more details.