By Tim Gorrell, Executive Director, Ohio Tuition Trust Authority
November 28, 2017
Ate all the leftovers from Thursday’s Thanksgiving dinner? Check.
Took advantage of the sales during Black Friday, Small Business Saturday, and Cyber Monday? Check, check, and check.
Participated in the global day of giving on Giving Tuesday? Che … wait, what?
Held on Nov. 28, Giving Tuesday marks the start of the charity giving season which lasts through all the holiday celebrations. Giving Tuesday emphasizes meaningful offerings of your time, financial support, or talents for the benefit of others. It’s a day dedicated to giving back.
Many great charity organizations are looking for a helping hand this holiday season as they, in turn, reach out to the less fortunate. Visit your favorite charities’ websites on Giving Tuesday to see how you can fulfill their biggest needs. Through early generous donations, some charities may even offer a match to your donation, stretching your dollars to help even more. If you’d like to investigate a charity, use websites like CharityNavigator, CharityWatch, and GuideStar that rate how effectively charity uses its donations.
Sometimes, charity begins at home. While you’re thinking where you’d like to help, consider giving towards a loved one’s college education by contributing to their college savings account, or even starting one for them.
Named after section 529 of the Internal Revenue code, a 529 plan is a college savings account with some major advantages such as tax-free earnings and tax-free withdrawals for qualified higher education expenses to encourage families to save for their children’s future college costs. Funds saved in these accounts can be used across the nation at any accredited educational institution eligible to participate in federal financial student aid programs– whether for an associate, certificate, bachelor’s, graduate or vocational degree.
You don’t have to give big to make a contribution to a 529 plan. Some college savings programs have no minimum contribution requirement. Give to level with which you are comfortable. Maybe you’re inspired to make continuing monthly contributions to the 529 account to show your continual support for your loved one’s college education plans. Some programs offer a state tax income deduction or credit for contributions made to a 529 plan for residents of that state. Some states also offer a gift-giving platform or registry to encourage friends and family to give to a beneficiary’s account. When you visit CSPN, you can review the state tax benefits for your home state’s 529 program and visit their website to learn more about gift-giving options.
If you are able and to want to frontload a loved one’s 529 plan, individuals can invest up to $14,000 ($28,000 for married couples) per beneficiary without incurring any federal gift-tax consequences. You can even contribute up to $70,000 per beneficiary in a single year ($140,000 for married couples) 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 Tuesday at any point this holiday season and contribute to a 529 account, or even start one for a loved one. For more information on your home state’s 529 college savings plan, visit CSPN’s state page to review the detailed information.
About the Author
Tim Gorrell is the executive director of Ohio Tuition Trust Authority. For more than 25 years, Ohio Tuition Trust Authority has sponsored and administered CollegeAdvantage, Ohio’s 529 College Savings Program. CollegeAdvantage oversees more than 633,000 accounts and over $10.88 billion in assets. Visit CollegeAdvantage.com or call 1-800-AFFORD-IT (233-6734) for more information.