Good news for Wisconsin families! The Edvest 529 College Savings Plan’s Wisconsin tax benefit has been raised to $3,140 for each future student! The increase also applies to Tomorrow’s Scholar, Wisconsin’s financial advisor-sold 529 college savings plan.
What This Means for You
Simply put, Edvest account holders may enjoy significant tax benefits while preparing for the cost of higher education.
Wisconsin residents, regardless of their relationship to a child, may reduce their state taxable income by up to $3,140 for each future student per year ($1,570 for divorced parents). Meaning that if you have accounts for two of your children or grandchildren, you may be eligible for a state tax deduction of up to $6,280. Three accounts…$9,420 and so on.
Plus, any earnings on your Edvest account are tax-free at both the state and federal level when used to pay for qualified college expenses.
Carry Forward for Future Tax Benefits
Are you rolling over balances from another 529 plan or plan to make a contribution from savings, inheritance or bonus? If your contributions are greater than the maximum state tax benefit of $3,140, you may carry forward the balance until exhausted.
You might find you want to make a larger gift but you’re hesitant to commit. What will it mean for you during tax time? What are the implications to your estate? First, speak with your financial planner, tax attorney or estate planning attorney. Then consider giving the gift of higher education to the child in your life! There’s no federal gift tax on contributions up to $14,000 per year for single filers and $28,000 for married filers.
You can even accelerate that gift in one year by gifting amounts up to $70,000 for single filers and up to $140,000 for married filers if pro-rated over 5 years. This means you could make a one-time gift equivalent to the 5-year amount and it could all qualify for the federal gift tax exclusion. Consult your tax advisor.
Why Save with Edvest?
SavingforCollege.com recently ranked the Edvest College Savings Plan as one of the Top 10 Performing 529 College Savings Plan and previously awarded the program a 5-Cap Rating for the Plan’s flexibility, attractive investments and additional economic benefits.*
Preparing for the cost of higher education with Edvest can make a difference. Your Edvest funds may be used at colleges, technical schools and grad schools nationwide and many schools abroad. Pay for tuition, room & board, books, computer/tablets and internet access, and other qualified expenses. To learn more, visit Edvest.com or speak to an Edvest College Savings Specialist Monday through Friday from 7 am to 7 pm at 1-888-338-3789.
*Source: Savingforcollege.com, December 1, 2016.The Edvest College Savings Plan received a 5-Cap Rating for Wisconsin residents and 4.5-Cap Rating for non-residents. A 5-Cap Ratings represents the attractiveness of a 529 plan, relative to all other 529 plans, by assigning an overall rating to each 529 program ranging from 1 Cap (least attractive) to 5 Caps (most attractive). 5-Cap Ratings represent an assessment based on many considerations such as flexibility, liquidity and availability, ownership rights, state benefits, investment approach and safety, program resources and financial aid impact. It is not strictly a measure of historical returns, and it is not a predictor of future investment performance, level of investment risk or financial solvency of the program funds. These ratings are not the result of a fixed formula and a significant portion of the analysis is subjective. Before establishing a 529 account and making contributions, it is imperative that investors read and understand all enrollment materials and disclosures from the programs.
To learn more about the Wisconsin’s College Savings Plan, its investment objectives, tax benefits, risks, and costs please see the Disclosure Booklet at edvest.com. Read it carefully. Investments in the Plan are neither insured nor guaranteed and there is the risk of investment loss. If the money isn’t used for qualified higher-education expenses, a 10% penalty tax on earnings (as well as federal and state income taxes) may apply. Check with your home state to learn if it offers tax or other benefits for investing in its own 529 plan.
Taxpayers should seek advice from an independent tax advisor based on their own particular circumstances.
Neither TIAA-CREF Tuition Financing, Inc., nor its affiliates, are responsible for the content found on any external website links contained herein.
TIAA-CREF Tuition Financing, Inc., Plan Manager. TIAA-CREF Individual & Institutional Services, LLC, member FINRA, distributor and underwriter for the Wisconsin College Savings Plan.
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