529 Account

Taking out one of the various different 529 savings plan in the State of Ohio can offer a parent a wide number of benefits. All the Ohio 529 plans now in place are designed to help to save towards paying for their child's college education, which if they stay on for a number of years can prove to be extremely expensive.

So what benefits can a parent gain from applying to contribute funds to an Ohio 529 plan such as College Advantage. Below we hope to provide the answers to some of the more 529 FAQ's that parents may have where the College Advantage 529 plan is concerned. But first let us take a look at the benefits that a parent can gain from setting up a plan like this.

1. All the earnings made on the investment are completely tax-free. Also, any withdrawals made in order to pay for any kind of higher education expenses are exempt not just from Ohio income tax but also Federal income tax as well. But if a parent chooses to withdraw funds that are not classed as being higher education, expenses are subject to a 10% Federal tax penalty.

2. A parent is able to deduct a maximum of $2,000 each year from the Ohio Income Tax that they are required to pay. Not only is a parent able to deduct the $2,000 each year from their Ohio Income Tax return but they can deduct the same amount for each child they have a plan for. This same amount can be deducted each year and also with this plan it allows for a parent unlimited carry forward with regard to their tax returns in future years. Also it is not only the child's parents who are entitled to this deduction any other person who contributes towards this type of 529 savings plan is entitled to the same tax deduction as well.

3. The funds that are raised through this plan cannot only be used in accredited colleges in Ohio but anywhere in the USA as well.

4. The money invested and which is made during the time prior to the child attending college will help to pay for their tuition fees, room and board as well as the books they will need.

5. The contributions a parent makes can be as little as $15 each month and there are no enrolment or maintenance fees to pay. Plus the fees a parent will need to pay to help maintain the account are very low as well. So if you want you can start off by paying the minimum amount allowed based on what you can actually afford and then increase the amount if you so wish at a later date. Also, other members of the family, relatives or friends can contribute to the plan as well.

6. Another benefit is that if a parent wishes they are able to transfer the funds from their Ohio 529 plan (some or all of them) over to another child and are able to withdraw the funds at any time they wish.

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