By Trisha Good, Executive Director, Ohio Tuition Trust Authority
November 28, 20023
You kept to your plan to save on your holiday shopping this year. You took advantage of the Black Friday deals, supported your neighborhood shops on Small Business Saturday, and searched the internet for the best steals on Cyber Monday.
This brings us to today, Giving Tuesday, which marks the start of the charity giving season, which lasts through all the holiday celebrations. Giving Tuesday emphasizes meaningful offerings of your time, talents, or financial support for the benefit of others.
So why not consider taking all those shopping savings and making a 529 contribution with them? Giving to a loved one’s 529 college savings account — or starting an account — is truly a gift with value and significance. And it is one gift that your loved one can never outgrow.
What’s a 529 account? It’s a higher education savings plan that grows tax-free, and withdrawals taken for qualified higher education expenses are free from federal and state income tax. 529 funds can be used at any federally accredited educational institutions nationwide – whether at a four-year program, community college, trade or vocational school, tech school, certificate program, graduate or professional degree, or any other post-secondary school, as well as apprenticeships registered with the US Department of Labor. College Savings Plans Network (CSPN) has a wealth of knowledge you can review to learn more about 529s. In fact, CSPN can even show you more about your own home state program, which may offer state income tax credits or deductions for contributions made to their 529 plan.
Contributions to a 529 plan can start as low as $10 in some state programs and can be increased to almost any amount. You can even set up an automatic monthly amount to deposit into a 529 account to show your continual support for your loved one’s college education goals.
Per federal 529 laws, in 2023, individuals can invest up to $17,000 ($34,000 for married couples) per beneficiary without incurring any federal gift-tax consequences. You can also contribute up to $85,000 per beneficiary in a single year ($170,000 for married couples making a proper election) and take advantage of five years’ worth of tax-free gifts at one time. For more information, consult your tax adviser or estate-planning attorney.
Celebrate the spirit of giving during this holiday season, contribute to a 529 account, or even start one for a loved one. If you’d like more information on your home state’s 529 college savings program and its tax benefits, you can visit CSPN’s resource page or compare different state-run 529 programs. After researching these tax-advantaged college savings programs, consider giving the gift of higher education to someone you love.
About the author:
Trisha Good is the executive director of Ohio Tuition Trust Authority. For more than 34 years, Ohio Tuition Trust Authority has sponsored and administered Ohio’s 529 College Savings Program, CollegeAdvantage. Ohio’s 529 Plan oversees more than 670,000 accounts and over $15 billion in assets as of Sept. 30, 2023. Visit CollegeAdvantage.com or call 1-800-AFFORD-IT (233-6734) for more information.