Community Corner

Time Running Out To Earn 2013 Tax Deduction for College Savings

Contributions to Virginia college savings plans can be a last-minute gift as well as a tax deduction.

You can still get a state income tax deduction by saving for college if you move quickly. 

Contributions to Virginia529 college savings accounts — which can be given as gifts — must be made by Dec. 31 to qualify. 

“This is a great time of year to make a contribution to your account or that of a family member or friend,” said Mary Morris, Virginia529 CEO. “Whether maximizing your state income tax deduction or just making a lasting gift of education, contributions to a 529 college savings account make wonderful and simple gifts.”

Grandparents, other family members and friends have two options to give contributions to a beneficiary: open Virginia529 accounts in their own names or contribute to another owner’s account using printable gift certificates available new this year.

Virginia taxpayers can deduct contributions up to $4,000 per account per year. There is no dollar limit for taxpayers age 70 (by Dec. 31) and above. Taxpayers with multiple accounts (including couples filing jointly) may deduct up to $4,000 in contributions to each Virginia529 account.

The deduction applies to contributions made to any of Virginia529's four programs—prePAID, inVEST, CollegeWealth and CollegeAmerica.

In addition to the state tax benefits, 529 accounts have several federal tax advantages as well. The best known advantage is that earnings on 529 accounts are not subject to tax — federal or state — when used for qualified higher education expenses. 

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 Virginia529 accepts applications for new accounts and payments for new and existing accounts online at Virginia529.com, by mail or in person at the agency’s office in Chesterfield. Visit Virginia529.com for more information, addresses and December office hours.

 

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