As the cost continues to rise for college education, the state of Georgia is stepping up for the residents of Georgia and offering a new increased tax deduction that can really help Georgia taxpayers.
All Georgia single taxpayers may deduct up to $2,000 each year on behalf of any beneficiary regardless of their annual income. Beginning with returns filed in 2017, all Georgia joint taxpayers may now deduct up to $4,000 each year on behalf of any beneficiary regardless of their annual income. Please note that a transfer of funds from another state’s 529 plan is not eligible for the Georgia income tax deduction. Georgia tax forms refer to the Path2College 529 Plan as the “Georgia Higher Education Savings Plan” (GHESP); the Path2College 529 Plan is established by the GHESP.
Contributions made during the tax year, or before the following year’s federal tax filing deadline are eligible for the deduction. State tax benefits offered in connection with the Path2College 529 Plan are available only to Georgia taxpayers. You should consult with a qualified tax advisor regarding the application of Georgia state tax benefits to your particular circumstances, but this could be a huge opportunity to kill two stones with one bird.
If you have two children you are currently putting away money for future college education, you could get up an $8,000 tax deduction. At a 6% savings rate, this means you can save almost $500 in taxes just by saving money for the future. Remember, 529 Plans cannot be used for K-12 education, and can only be used for higher education (college, law school, etc.). If you first child doesn’t use all of the 529 money, you can change beneficiaries over to your next child or a number of other beneficiary options.
For more information, you can go to www.path2college529.com.
Financial Professionals can get more information here.