It’s graduation season, and across the country, students are graduating from all levels of the education spectrum: pre-K, kindergarten, elementary school, high school, and, of course, college.
Today is May 29, but it can also be called 529 Day. It is the day parents, guardians, and friends begin saving for the future of those students.
According to an expert, Georgia’s Path2College 529 Plans are engineered to assist in saving for what is next, even if that road doesn’t lead to college. State of Georgia Treasury Program Director Bethany Whetzel spoke to The Atlanta Voice about the benefits of a Path2College 529 plan.
Whetzel was asked why it is important for parents, families, and guardians to have Path2College 529 plans in place for their children’s future. She said Georgia’s 529 plan is a great way for families, friends, anyone who has a loved one who they have faith or believe that they will have post-secondary expenses or any kind of educational expenses to prepare.
“A 529 plan is a way for families to save in a tax-advantaged way,” Whetzel said. “The earlier you start saving and have money in that account, you’re going to be growing that money in a tax-deferred way. You’re going to be using that tax-free earnings to contribute to that compounding interest, so your savings power is doubled.”
According to data from the Education Data Initiative, the average cost of a college education in this country, for example, is $27,146 for a student living on campus.
Whetzel continued to speak about the tax advantages of 529 plans, including not paying income taxes on that investment. For example, a Georgia resident who invests money into a Path2College plan, which is also a Georgia plan, you can receive a state income tax deduction up to $8,000 if you are filing jointly or $4,000 if you’re a single filer per beneficiary.
“So, that means if you are contributing, let’s say, $8,000 to your daughter’s plan and you’re contributing $8,000 to your son’s plan and you are filing jointly, that means that you could receive up to a $16,000 income tax deduction on your state taxes,” Whetzel explained. “So, it’s really great because it’s not just the cap on how much you can receive as a tax deduction, but it’s per beneficiary.”
And that doesn’t have to be for your child, says Whetzel.
“I could open an account for a close loved one, or my niece or my nephew, and I could also receive that tax deduction as well,” she said.
The Path2College 529 plans don’t just have to be for a post-secondary school, according to Whetzel. It can be used for educational institutions across the country, and even some foreign institutions, in some instances. That also includes apprenticeship programs.
“So, if you are in a qualifying apprenticeship program with special certification related to it, you can use that money to go to that program as well,” Whetzel said.
If a Path2College 529 account is set up through Saturday, May 31, the state will contribute $50 to that plan after six months.
“So, it’s not just, you know, not just post-secondary, not just four-year college. It could be a technical school, a community school, if, like, speaking about like barber school, if it’s accredited, that could be, you know, an acceptable expense. And yeah, so there’s a lot more.
