As parents, we want to provide for our children. We give them food, clothing, shelter and affection. These are things they need now and today , but what about their needs down the road?
Parents also want to be able to provide for their children’s future, which is what my husband and I did when we opened up an Oklahoma 529 College Savings Plan for our son.
By saving and investing money to help pay for college or trade school, we’re giving our son the gift of education – a gift with lifetime benefits.
I must say, I felt an immense sense of pride after opening our son’s college savings plan because I knew it was one of the most important decisions I could make on his behalf.
The tax advantages that come with a 529 plan makes it a much smarter move than just opening up a regular savings account. For starters, contributions to our son’s Oklahoma 529 College Savings Plan can be deducted from our Oklahoma taxable income up to a maximum of $20,000 per year ($10,000 for individual tax payers).
In addition, the earnings portion of any distributions used to pay for qualified higher education expenses will be free from federal and Oklahoma income tax. That’s huge! It’s also important to know that what is considered “qualified” expenses goes beyond books, tuition and fees. For example, certain costs associated with room and board can be paid for with money from a 529 plan.
Birthdays, baby showers, christenings, graduations, and Christmas create perfect opportunities to give a child the gift of a college education.
Grandparents, relatives and friends can also open up a College Savings Plan on behalf of a beneficiary or contribute to a child’s existing College Savings Plan. Through the Oklahoma College Savings Plan website, people can make online contributions and even print out gift certificates.
As gift givers, we have the choice to give presents that can be enjoyed now or later. The choice is yours.
Since different states vary in their 529 College Savings Plans, make sure to learn about the benefits, tax advantages and risks associated with your state’s specific plan.
A good education is the greatest gift you can give yourself or anyone else. – Mahtab Narsimhan