Now is the ideal time to start saving for your child’s education. The cost of college tuition has increased dramatically over the past few years. Many specialists believe that the cost of a higher education will continue to rise in the near future. The Utah 529 college savings plan or the UESP plan is a great way for parents to start saving now for their children’s future schooling needs.
The UESP 529 plan was rated as one of the top 5 529 college savings plans in the United States. Morningstar also ranked the plan in their top 5 list of college savings programs. The plan offers parents an easy and inexpensive way to save for future higher education costs. There are many benefits that are associated with the Utah college savings plan. Here are just a few of them that you will want to consider before you open your account.
Utah 529 College Savings Plans Tax Benefits
While your 529 College savings fund grows, you owe no federal or Utah state taxes on the earnings that you receive. When you withdraw funds from your account to use for qualified higher education expenses, no state or federal income taxes are assessed. Some of the qualified higher education expenses include tuition, books, college fees, and certain room and board costs. Other expenses required to attend college may also qualify as part of the UESP program like computers and equipment needed for school.
Gift tax benefits can also be a great advantage for relatives or family members that want to help. They can give a gift towards the 529 college savings plan and deduct it from their taxes. Gifts of up to $13,000per year per beneficiary are tax free. Utah taxpayers can also benefit from a $1710 deduction from their annual income tax. If you file jointly that you are eligible for a $3420 deduction. This can save couples hundreds of dollars a year in taxes which can then be used as money towards your Utah college savings plan.
Fee-Free Savings with the 529 College Savings Plan
UESP program offers twelve different investment options that you can participate in. Utah residents who invest in Option 1 (the Utah Public Treasurer’s Investment Fund) will not be charged annual Maintenance Fees. If you are a resident of Utah and an account owner, the annual Administrative Maintenance Fee will be waived as well.
Initial investments or mandatory ongoing contributions are not required. This makes saving for college possible for all people not matter what their income is. You can open your account with a zero balance and start saving when it’s right for you.
Managing your UESP 529 College Savings Plan Portfolio
You are in total control of the money in your account. You choose which portfolio is right for you and your investment strategy. The Utah college program lets you choose options with varying degrees of risk—and potential reward. Your child’s age will be an important factor when you decide how to invest your money. If you start saving while your child is still young you can have a more aggressive portfolio. This can lead to potentially higher returns. The sooner you open your college savings plan the better. Getting a head start will increase your odds of acquiring the funds that you need to obtain your financial goals.
Savings for college can be hard for many families who are trying to make ends meet. The Utah 529 college savings plan was designed to help parents start early with small contributions. The many benefits make it easier to save money and increase your gains. Take advantage of the many benefits of the top 5 rated Utah 529 college savings plan.