If you have children approaching or in college, the end of summer means one thing: a fall tuition payment! Fortunately, as New York State residents, there is a little tax break for college expenses. By contributing to the NYS 529 College Savings Plan, you are able to deduct up to $10,000 for a couple ($5,000 for an individual) on your NYS income tax return. At approximately a 7% state tax rate, this could save a family $700/year on their state income taxes.
For the families with students currently in college, you are not out of luck. If you contribute the $10,000 into a NYS 529 Plan, then pay the tuition payment from the 529 Plan, you are also eligible for a tax deduction. The clearing time will take approximately 2 weeks, so please plan accordingly. By just adding the one step before the tuition payment, you can also take advantage of this credit.
Finally, if you happen to be a family who is subject to federal estate taxes, a Legacy 529 Plan may be the perfect way to reduce estate taxes and provide a perpetual education fund for your heirs. We would be happy to discuss this with you individually.
College savings can be an important part of your financial picture, and Rockbridge can help clarify your options.