New York's 529 Plan helps its residents save money for college.
College tuition, room and board costs may exceed $100,000 over the course of four years. For relief, New York State invites residents to participate in its 529 Plan, which offers special tax incentives for higher education savings. Learn the details of the program so you may plan effectively.
Identification
The New York 529 Plan offers federal and state tax deductions for New York residents who use the vehicle to pay for college expenses for themselves or a child. As of 2010, you may deduct $5,000 ($10,000 for married filing jointly) worth of 529 contributions from your New York state taxes. Your New York 529 Plan withdrawals are also free from federal and state taxes, if the money is used for qualified education costs.
Features
New York State defines qualified education costs as post-secondary tuition, fees and books. You may also receive tax breaks for spending money on computer equipment and software that is primarily used for education.
Strategy
As of 2010, you may choose from 16 different investment choices through Vanguard for your New York 529 Plan. The portfolios include both aggressive growth and conservative strategies. You may also select aged-based portfolios, which automatically adjust themselves with time as college nears.
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