pay the way
save on 2014 taxes
Alabama’s 529:
Reap Tax Benefits While
Saving for College
By Young Boozer, State of Alabama Treasurer
Few investments allow parents to save for their teen’s
college expenses while at the same time securing
special tax advantages. But with Alabama’s
CollegeCounts 529 plan, they can do just that.
Under the 529 Section of the tax code, benefits are provided to families saving for
future college fees, tuition and other expenses. Alabama taxpayers can receive a
generous state income tax deduction of up to $5,000 ($10,000 for married couples
filing jointly) on contributions to CollegeCounts each year. To enjoy tax advantages in
2014, however, Alabama 529 accounts must be opened by Dec. 31.
CollegeCounts offers a number of quality investment fund options, including
Vanguard, T. Rowe Price, Fidelity and PIMCO. There are no minimum contribution
requirements, allowing families to open accounts and save a little each month. Like
any investment fund, compounding interest can be earned and varies based on
portfolio type and fluctuations in the economy.
As college costs continue to rise—with annual costs at $10,730 for a two-year
college and $18,391 for four-year—so does the importance of setting aside money
to lessen future financial burden. 529 funds may be withdrawn and used at colleges,
universities, trade schools and graduate schools at one-, two- and four-year schools in
Alabama and across the U.S.—including vocational, technical, community, public and
private colleges and universities.
While it’s never too late to begin investing, time is winding down on the potential for
tax savings as 2014 comes to a close. Visit CollegeCounts529.com to learn more or to
sign up today.
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CollegeCounts
Alabama’s 529
Fund provides:
• o minimum contribution
N
requirements, allowing parents,
grandparents and guardians the
ability to open accounts and
deposit funds at any time through
underlying investment funds,
such as Vanguard, T. Rowe Price
and Fidelity
• pecial tax benefits to Alabama
S
residents saving for future college
expenses, including a generous
state income tax deduction
of up to $10,000 for married
couples filing jointly ($5,000 for
individuals) on contributions to
CollegeCounts each year
• eneficiary transfer to another
B
member of the family if the
original beneficiary elects not to
attend college or trade school
• omplete withdrawal of funds
C
if unplanned medical or other
financial needs arise (check with
your tax professional for potential
tax consequences)
• ccount continuation under
A
a successor (as designated by
the original account holder or
probate) should incapacitation or
death occur