Great Tips To Help Parents Save for College Education

Great Tips To Help Parents Save for College Education - The high cost of college tuition in Louisiana universities (see here) is making it harder and harder for Louisianians of average means to afford a higher education. This isn’t good for our state. But there are some tax breaks parents and students can look to for some relief from the tuition price spiral.

There is a program available for families who invest in the START savings program for college, in which they can deduct up to $4,800 on their Louisiana State tax returns, according to State Treasurer John Kennedy.

“Every little bit helps in this economy, and it’s important that families are aware of every tax break that’s available to them,” said Kennedy. “Thousands of Louisiana families agree that START is a great deal for taxpayers (more here). But it’s much more than another tax break. It’s also a smart investment.”

Individual investors who made deposits into the START program by December 31, 2012, can exempt up to $2,400 per beneficiary per year from income reported on their state returns. For married couples filing jointly, the exemption can be up to $4,800.

If a START investor cannot claim the full exemption this year, he or she can carry the remainder forward to next year. For example, if a married couple deposited $4,000 into a START account this past year, they can deduct $4,000 on their joint return. Because they could not claim the full $4,800 tax exemption, the remaining $800 would be deductible next tax year. The couple could deposit $5,600 into their START account next tax year, and claim the entire amount on their joint return.

Families see additional tax benefits of START when the time comes to take out funds to pay for college. START withdrawals for college expenses are not subject to state or federal taxes. Likewise, any interest earned on START deposits is not taxed.

There are currently more than 44,000 START accounts with deposits totaling $405 million. Deposits have consistently increased since the program’s inception and START took in nearly $63 million in new deposits in 2012.

The rate of return on START investments ranged from 2.5 percent to 18.3 percent this past year depending on the investment option chosen. Additionally, all START accounts earn a state-paid match on deposits from 2 percent to 14 percent, depending on an account’s classification and owner’s adjusted gross income.

For more information on Louisiana’s START savings program, visit www.LATreasury.com or contact the Louisiana Office of Student Financial Assistance at 1-800-259-5626.

Don’t let high college tuition costs beat your dreams of a college education for you or your children. Plan ahead, save ahead and take advantage of such programs  as START.

Source : www.americanpress.com