Once you get started on a regular savings program, you’ll be surprised to see how quickly your account balance grows. With direct deposit, a specified dollar amount is deducted directly from your paycheck and credited to your savings account at a bank, credit union, or other savings institution. If you lack the discipline to do this, find out if direct deposit is available through your employer. When you pay your monthly bills, write out a check to you, and deposit it into your savings account. The more you save, the less you will need to borrow (if at all) to pay for college! It’s a good–no a great–idea to start saving now! Think you can’t afford it? Try paying yourself first. With the increasing cost of higher education, saving for college becomes even more important. While financial aid may be available to help pay college costs, students and their families should contribute as much as they can. Rollover penaltyĪ rollover of assets from your account in the Program to a qualified education savings program in another state is subject to New York State income tax on earnings, as well as the recapture of all previous New York State tax deductions made during the life of the account. For more information, consult a qualified tax advisor. Or you can choose a special election that allows you to treat a single $70,000 contribution ($140,000 for married couples) as if it were made over a 5-year period.*** Gifts in excess of these amounts may be subject to federal gift tax. You can contribute up to $14,000 a year (or $28,000 if married filing jointly) without incurring gift taxes. Contributions to a 529 college saving plans are not deductible for federal income tax purposes. Your assets grow tax-deferred, and withdrawals are exempt from federal income tax, as long as they’re used for qualified higher education expenses. If you are a resident or taxpayer of the another state, you should consider whether that state offers a 529 plan with tax advantages or other benefits that are not available through this Program. New York taxpayers can also deduct up to $5,000 of contributions ($10,000 for a married couple filing jointly) on their state income tax return each year. Withdrawals are exempt from New York State income tax when used for qualified higher education expenses. You can use this investment to pay for tuition, room and board, books, supplies, and other qualified higher education expenses. The Program features a wide range of investment choices, tax-free withdrawals when used for qualified higher education expenses, and contributions that are tax-deductible (up to certain limits) for New York State residents. New York’s 529 College Savings Program Direct Plan provides a flexible, convenient, and low-cost way to save for college.
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