College Savings Plans - DOC

							Brenda Schmitt, ISU Extension
Family Finance Specialist
641-512-0650
schmitt@iastate.edu



College Savings Plans

Putting money into a 529 education account is one of the best ways for
people to give away money. Earnings on the accounts build free of federal
and state income taxes as long as the money is used for qualified education
expenses. It costs nothing to set up. Your only expense is an annual asset-
based fee of 0.50%, one of the lowest of any 529 plans.

You can save for anyone in a 529 education account – even yourself. You
can use your account to pay for tuition, fees, books, room and board and
supplies at any eligible postsecondary school in the United States and
abroad.

You can invest as little as $25 each time you contribute and you don’t have
to contribute each month or even each year. You can contribute by
automatic investment, electronic bank transfer, payroll deduction, check or
by moving assets from other college savings vehicles. You can continue to
on behalf of a beneficiary until the total balance of all College Savings Iowa
accounts held for the same beneficiary reaches an aggregate maximum
balance of $320,000.

Money contributed to a 529 is subject to the $13,000-a-year gift limit; only
direct payments for education and medical expenses fall outside of that. But
you can “font-load” five years worth of contributions in one year - $65,000
for a single giver or $130,000 for a couple – without paying the gift tax.

The College Savings Iowa 529 Plan has a unique feature that allows family
and friends to give to the college saving fund as a way to celebrate a special
occasion or milestone such as a birthday, holiday, graduation or other
celebration. By filling out the celebration’s details on the Ugift feature found
on the College Savings Iowa 529 web page, family and friends will receive
an invitation and a gift coupon via email. A check mailed to the College
Savings Iowa along with the coupon will ensure the gift is invested directly
into your child’s College Savings Iowa account. A “Thank You” is then email
to your invitee to acknowledge receipt of the gift.
For more information about College Savings Plans, check out
https://collegesavingsiowa.s.upromise.com/content/home.html.