Save for Your Child’s Future and Get a Tax Deduction!
March 1, 2019
One of the most frequent questions Allison Ford says she gets from parents is, ‘What is the best way to save for your children’s future?’
A CPA and parent herself, Ford recommends Future Scholar – South Carolina’s 529 College Savings Plan – to clients, to friends and even family members.
“One of the many things I love about the Future Scholar plan, is that you don’t pay any tax on the earnings, and if you take it out for education, you never pay tax on the earnings,” she says.
In fact, Ford is a Future Scholar account holder herself. Not only was it easy to set up, she says, but the tax advantages were just too good to pass up, something she frequently underscores with her clients.
“It’s a great way to maximum your ability to save for college,” she adds.
And yet many parents still don’t realize the full extent of those benefits.
A ‘No Brainer’ Decision
“What was amazing and we weren’t aware of it was that basically the full value (of the contributions) was a South Carolina state tax deduction,” says Danielle Howley.
After she and her husband, Marty, moved to the Palmetto state, the couple decided to move the money they were saving in a previous account into Future Scholar plans for each of their children.
Not only does the money you save in a Future Scholar plan grow tax free from state and federal taxes, as the Howleys discovered, but contributions are also tax free. And, if you file an S.C. tax return, as the Howleys were doing, you can qualify for a dollar-for-dollar deduction on your taxes as well.
“We thought yeah, this really a no brainer,” she says. “It’s a giant tax deduction. …It was just a great financial decision.”
Not Too Late
Think it’s too late to claim a deduction on this year’s taxes? The good news is, it isn’t!
South Carolina is one of only a handful of states that allows its residents to contribute up to the April 15 deadline and still get a deduction on the previous year’s taxes.
But no matter when you start saving, the most important thing is just to get started, Ford says.
“Because you have made that commitment, and you have started along the path to eventually have funds available to help your child achieve their goals,” she says.
To learn more about Future Scholar, visit www.FutureScholar.com.