Tax filing for the 2017 tax year is in full gear.
Recent changes to rules for college savings accounts could mean there are still ways to lessen your tax burden for the year.
The allowable tax benefit for a 529 college savings account is at $3,140 for 2017, and you can decrease last year’s taxes by putting money into a 529 by April 17, says JIm DiUlio, director for the Wisconsin 529 college savings program. It’s a program that doesn’t lack for participants.
“We’re really popular,” DiUlio said. “Gosh, we have well over 200,000 accounts just here in Wisconsin alone, plus in other states, as well.”
The Wisconsin program just recently passed the $5 billion mark for total investments. The 529 proceeds are tax free when used for qualified education expenses.
DiUlio recommends students keep adding to the 529 moving forward.
“The idea is that, you know, if you start early and you start young and you start with small amounts, it doesn’t take much time to really build,” he said. “I think that’s the secret.”
If you’re wondering if a college savings plan makes sense DiUlio says look at it this way:
“Let’s just say you get lucky and you get a scholarship or something,” he explains. “You might want to save the money for down the road, if there was graduate school or if you want to become a dentist or other types of professional school.”
Another change for the 529 plans for 2018 is that money in the college savings accounts can be used for private K-12 education as a tax sheltered expense.