While it may be too late to change the financial decisions of the past year, it’s not too late to contribute to a 529 college savings account and claim the tax benefits of that investment on your tax return.
Contributions to the state of Georgia’s Path2College 529 Plan made by the tax deduction deadline, this year – Tuesday, April 17 – are eligible for deduction on the preceding year's tax return.
“With tax season upon us, families are working on their 2017 tax returns and focusing on financial planning for the future,” said Caylee Noggle, interim president of the Georgia Student Finance Commission, which partners with the Office of the State Treasurer to administer the Path2College 529 Plan for the state of Georgia.
“There’s no better time than now to save for college – not only will it help establish a financial foundation to help your loved ones achieve educational goals, but it may also provide immediate tax benefits.”
The Path2College 529 Plan allows families to save for education-related expenses by investing as little as $25, and anyone can open an account – you can even open an account for yourself and take advantage of the tax benefits if you plan to go back to college.
Contributions to the Path2College 529 Plan made before the tax deadline each year are eligible for a prior-year state income tax deduction regardless of annual income. Contributions are deductible for Georgia income tax purposes up to $4,000 per year, per beneficiary, for those filing a joint return and up to $2,000 per year, per beneficiary, for those filing a single return.
Any earnings in the Path2College 529 Plan are also federal and Georgia income tax-deferred. Withdrawals for qualified higher education expenses, which may include tuition, fees, books, supplies and equipment required for enrollment, such as computers and related technology such as internet access fees, software or printers, are federal and Georgia income tax-free.
“Many financial advisors believe that, next to retirement planning, saving for college is one of the most important financial decisions a family will ever make,” said Noggle. “This is especially true since both the value of and cost to obtain a college education continues to rise.”
The Path2College College Savings Planning Calculator, located under the Plan tab at www.Path2College529.com, can help families estimate how much to save. Savings in the Path2College 529 Plan can be used at virtually any school in the United States and some abroad.
Eligible institutions include any school that participates in the federal financial aid program, which encompasses all public institutions and most private colleges. Savings can be used to obtain two-year vocational/technical education, a traditional four-year degree and for post-graduate work.
The Path2College 529 Plan was established in 2002, and as of December 30, 2017, more than 150,000 families have saved more than $2.5 billion in the Path2College 529 Plan.
Additionally, more than 40,000 beneficiaries have withdrawn more than $690 million to pay for higher education-related expenses.
For additional information about the Path2College 529 Plan, its tax benefits or to open an account, visit www.Path2College529.com.