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.