Save for College! Tax Time Can Mean Extra Savings
It’s never too late to save for your children’s future higher educational expenses. Even better, it isn’t too late to do so while also helping your own financial situation for the 2018 tax year!
In Wisconsin, parents (and other family members) can save for kids’ college costs through one of the state-designated 529 plans: Edvest and Tomorrow’s Scholar. These plans work much like a 401(k) or IRA: Withdrawals are free from federal income tax if used for educational purposes, and contributions – up to $3,200 per child, per year – are deductible on your Wisconsin income tax return.
Furthermore, contributions for the previous tax year can be made through April 15, which means if you haven’t yet filed your Wisconsin income taxes, you still have time to make a 529 deposit and reduce your state income tax liability for 2018. According to recent survey by Sallie Mae, a major provider of student loans, an increasing share of parents are saving for college, and 529 plans are their most frequently used ways to save.
Here are other big findings from the national survey, which was conducted in early 2018: