Oregon 529 College Savings Plan

Oct 27, 2017 | By: Hanna Ellis

Oregon 529:

The Oregon 529 college savings plan was created by the State of Oregon. The state created this savings plan as a tax-advantaged way to help people save for the costs of higher education. All investment earnings can grow tax-deferred, and the best part is that you receive an Oregon subtraction which means your taxable income is reduced. Do you have a child, grandchild, or family member who needs funding for higher education? By opening up an Oregon College Savings Plan you can start saving money for them while also saving money on your taxes. What could be better?

Before you know it, 2017 is going to be over, and it will be time to file taxes yet again. You have the opportunity to contribute and earn a subtraction of $4,660 if you’re married filing joint and $2,330 for any other filing status’ on your 2017 taxes. You can start contributing today and all the way up until you file your taxes or April 17, 2018, whichever comes first. What if you want to contribute more than the amount being subtracted on your Oregon tax return? Great! You have the opportunity to carryover the excess contributions to the next four years. Many people search for ways to reduce the taxes they pay, and this appears to be a win-win solution both for you and for a family member’s education expenses.

Once your Oregon College Savings Plan is set up and you’ve made contributions, there are a few things you need to know. The first is that funds withdrawn for qualified use are not taxed. Generally, this includes education expenses such as tuition, books, and fees. Qualified expenses are what the 529 College Savings Plan is intended for. Visit The College Investor website, as they have a good list of qualified expenses. Any withdrawals taken that are non-qualified are taxed and subject to a 10% additional federal penalty. Some examples of these include travel, meals, and car payments.

It is common for many people to be hesitant when opening up a college savings plan if they aren’t certain their child will even attend college. The good news is you can re-assign beneficiaries at least twice a year without incurring any penalty or taxes. For example, you can roll funds from the 529 Plan for one of your children into a siblings plan without any penalty. Wealthfront wrote a great article on the benefits of saving more initially into the eldest siblings account and changing beneficiaries to the younger children later on. Compounding interest comes into effect and savings grow much bigger. The sooner you sign up and start saving, the bigger the benefit.

It’s not too late to help someone save for college, and it isn’t too late to receive an Oregon subtraction on your 2017 tax return. Visit www.oregoncollegesavings.com for more details and steps to set up an account and start contributing.




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