HudsonValleyBabyGuide.com 27
O
kay. The baby is here, and
while you have the everyday
tasks to consider, remember
that college costs are rising each
year. Experts advise that parents
investigate the 529 account, a state-
sponsored tax-deferred savings plan
that allows them to start saving
now.
Moira Tolan, associate professor
of business at Mount St. Mary
College in Newburgh, says, "In New
York State, you can start a 529 with
as little as $25. There's a small fee,
usually 25%, to manage the
account. The investment is exempt
from federal income taxes and you
are able to deduct $5000 a year
from your New York state income
taxes if you are single and $10,000,
if you are married file jointly.
She offers these tips:
The 529 account can be set up
by anybody for the purpose of a
beneficiary's education. The person
who opens the account controls it.
If the child named does not go
to college at age 18, the funds can
be deferred until they choose to go.
If the child named doesn't go
to college at all, the investment can
be transferred to another family
member. If no eligible family
members can be named beneficiary,
then the account can be closed and
earnings will be subject to federal
income tax and an additional 10%
federal income tax, as well as state
and local income taxes.
In New York State the
program is run by upromise.
Although one investment company,
Vanguard, manages the funds,
individuals can invest directly
through upromise.com.
For more information visit
collegesavings.org.
FAMILY
life
VISIT HudsonValleyBabyGuide.com
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Enjoy your newborn, but plan for college
