Saving for college is a great way to secure your financial future. The costs of college are rising and are not showing any chance of ever slowing down. Trying to work during college may seem like a good deal, but you will soon find that you are not able to work as much as you like and finding a job that pays anywhere near what you need for school is impossible. Many students take out loans to help them pay for the costs of college, but with interest rates and other fees, this is going to cost them thousands of dollars in the long run just trying to keep up with it all.
One idea that you can choose is using 529 plans to save for college. Not only is this going to give you some extra money to help you out when it is time to go to school, but it can also offer some great tax benefits when it comes to tax season. When you are interested in setting up a 529 plan to save for college and have questions about how this is going to affect your tax return this year, make sure to contact the professionals at M-E Accounting and Tax Services.
What is a 529 Plan?
One of the first questions that you may have when using 529 plans to save for college is what these plans are. This is a savings plan that you can use to pay for educational expenses that is operated by an educational or state institution. It is designed so that families are able to set aside some fund to help pay for the costs of attending college in the future. These savings plans can be used for the individual person if they plan to go back to school at a later date, or they can set one up in someone else’s name. It does not matter where you began this plan, you will be able to use the money at any of the recognized colleges throughout the country.
Options for 529 Savings Plans
There are several options that you can choose from when it comes to opening up your own 529 savings plan. You can choose which one seems the best for you or consider contacting M-E Accounting and tax Services and see which option they would recommend to help you save the most. The two plans you can choose from include:
Savings plans—these are going to work like your IRA or 401K. You will invest your contributions for the savings account into some kind of investment; this can vary depending on the kind of 529 that you chose and you can pick from the kind that makes the most sense for you. The account is going to up down and up based on how well the option you chose is doing. Your savings plan investor is required to send you documents to let you know how each of the plans are doing.
Prepaid plans—these plans will allow you the option to pre-pay part or all of your costs for a public college that is in the state that you are living in. You can also convert this money to using in an out of state or private college if you so choose later on. The benefit of this is that you can start school with part of the tuition already paid for. You can get the lower tuition that was available when you started investing, rather than hoping the costs of the college go down over the years or that you will have enough.
Both of these options are great for helping you to save a lot of money when it is time to go to college. Some people prefer to see how much they can make with the investment options and will go for that one, hoping to make much more than they originally placed in. Others like the idea of getting the tuition to stay still so they can save more over the time of their college experience. If you are considering using one of these methods to help you pay for college, make sure to contact M-E Accounting and Tax Services to get started or to help you decide which option is right for you.
Tax Benefits
It is possible to get some good tax benefits from using 529 plan to save for college. This is going to be seen as an investment opportunity so you will not have to count this money as a part of your income at that time. This means that you will be able to deduct the amount that you contributed to the plan from your tax return, saving you even more money when it comes to tax time.
To set up one of these accounts is easy. You can choose to work with an investor who is skilled and experienced with working with these plans or contact M-E Accounting and Tax Services to get started on this process right away!
529 savings plans are a great way to get a jump start on your college costs. But there are a lot of questions that people have concerning these plans and how they will be able to help them out. When you are ready to get started with you college savings plan, make sure to contact Motaz Elkhouly at M-E Accounting and Tax Services, Inc. in Cape Canaveral, FL to get it all started on the right foot.
M-E Accounting & Tax Services, Inc.