Giving the Gift of College this Christmas
When we have to buy for nephews and nieces, we are tempted to just go with the gift card alternative. Besides, not having time to attempt to be creative, we really don't know what to get them. The gift card is a way out.
How about giving them the gift of college?
With the holiday season fast approaching, think about giving your loved one a long-lasting gift that will go farther than the toys on their wish list. The holiday gifting option with significant tax advantages, and a more long-term and substantial impact is worth putting on your shopping list: 529 college savings plans. This link will go through what you need to know about how to gift.
The gift that gives back: There are benefits for the gifter as well as the giftee. Gifting to a 529 college savings plan allows you to contribute to a loved one’s higher education and get a tax break! Currently, 34 states and the District of Columbia offer a state income tax deduction or state tax credit for contributions to 529 plans. Not to mention, money in 529 accounts won’t be taxed as it grows. Withdrawals are also exempt from federal income tax when used for qualified higher education expenses, and similarly, many states also exempt withdrawals.
This is a tradition you can start at a young age and add to it every year. Remember that a college education plan is funded by a portfolio of many ways. The 529 plan can play a part in that overall funding.