Contributions may be gift, deducted from taxable income
State Treasurer John Perdue is urging West Virginians to open up a SMART529 college savings account before Jan. 1, as a worthwhile Christmas gift and a way to decrease your income tax bill.
“Each Christmas we like to say, ‘It’s better than a toy’ in promoting SMART529 contributions as gifts,” Treasurer Perdue said. “This year is no different. Of course, a SMART529 fund starter might be only a stocking stuffer but its effects will be long lasting and meaningful – you’re giving a child a leg up on life by starting a college savings fund.”
The Treasurer also mentioned that all three SMART529 plans – WV Direct, SMART529 Select and The Hartford SMART529 – carry both federal and state tax advantages for state residents. WV Direct offers other incentives, such as no minimum starting contribution; no subsequent minimum contributions; and a choice of investment portfolios designed for a range of risk tolerances and time horizons.
“If a person signs up for one of our plans before the end of the year, he or she can contribute whatever amount from now until Dec. 31 and enjoy the state tax modification for 2017,” the Treasurer said. “If you planned on spending a certain sum in December on higher education anyway, you might as well open up an account and pay the money out of there, for tax reasons.”
Anyone can contribute up to $14,000 per year ($28,000 for married couples filing jointly) to a beneficiary's SMART529 account without gift tax consequences. Also, anyone may contribute to a SMART529 account, including friends and relatives. If it’s available to you, contribute using Payroll Direct Deposit — the easiest option.
To open up a SMART529 account, go to www.SMART529.com or call 1-866-574-3542.