529 accounts provide a unique opportunity for parents, grandparents, and other relatives to save money for their children’s education.
We’ve all heard about how costly higher education can be, but most people weren’t aware of the special savings account set up to aid with the costs.
Deposited monies in a 529 account can be invested in a range of funds, bonds, and other investment alternatives.
How to Open a 529 Account
The first deposit into the 529 account needs to be at least $50, and recurring contributions for at least six months with a minimum commitment of $25 per month must be set up.
To sign up, go to mnsaves.org/newborn and enter the coupon code SmartStart23.
Furthermore, Minnesota taxpayers who use a 529 account can save money on their state taxes via a credit or a deduction.
According to MNSAVES, the deduction maximum is $3,000 for married couples filing jointly and $1,500 for single filers.
Based on their annual income, account holders may also be qualified for a maximum credit of $500 per year.
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$50 Bonus For New Accounts
The cash can grow tax-free as long as it is utilized to pay for K-12 or higher education.
Using a 529 account, account owners can save thousands of dollars in taxes over the course of a child’s life.
Minnesota residents will also receive a new incentive if they open a 529 account in 2023.
Minnesota’s 529 College Savings Plan, MNSAVES, recently revealed a new $50 bonus for the first-time accounts opened from September 1st through December 31st, 2023.
To be eligible, the child has to be born in 2023.
Aside from MNSAVES, parents and relatives have numerous other 529 plan alternatives, including accounts maintained by other states.
Financial consultants advise parents to consider their options before selecting a policy because some plans offer reduced costs and additional investing options that other plans do not.
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