There are all kinds of advantages to saving with CollegeCounts, but one of the most significant is the generous tax benefits you may be able to receive.
And while the holiday season is at the top of our minds right now, tax season is not far behind.
That means you only have a few more weeks left to make your last-minute contributions before the 2019 deadline! All contributions must be made on or before December 31st (or postmarked by December 31st if you’re mailing a check) in order to qualify for an Alabama state income tax deduction this year.
Remember, contributions to CollegeCounts are tax deductible up to $5,000 per individual tax return, or up to $10,000 if you’re a married couple filing jointly (and both spouses are making contributions).1 Now is the perfect time to add an extra contribution or two.
If you received a raise or a bonus at work this year, a CollegeCounts contribution is a great way to celebrate your extra income. You might even be getting a head start on your New Year’s financial resolution! Be sure to act fact to avoid missing the approaching deadline for 2019 contributions on December 31st.
Help others take advantage of tax benefits while helping your beneficiary! It is our understanding that any Alabama taxpayer can take advantage of the state income tax deduction for their contributions to an account, which is a great incentive for family members or friends to consider a gift to your CollegeCounts account.
A gift to CollegeCounts can truly make an impact on your beneficiary’s future college dreams, and our gifting platform, GiftED, can help you spread the word. Make sure a contribution to CollegeCounts is on your child’s wishlist for the holiday season. Then login to your account to send your friends and family an email invitation for a gift contribution to your child’s CollegeCounts account. We also have greeting cards or printable coupons for those who contribute who may want to add a bit of flair to the presentation when it’s time to open a gift.
However you choose to add a few extra contributions to your account, we encourage your commitment to saving. It’ll probably make doing your taxes a bit more exciting, too!
1Individuals who file an Alabama state income tax return are eligible to deduct for Alabama state income tax purposes up to $5,000 per tax year ($10,000 for married taxpayers filing jointly if both actually contribute) for total combined contributions to the Plan and other State of Alabama 529 programs. The contributions made to such qualifying plans are deductible on the tax return of the contributing taxpayer for the tax year in which the contributions are made. In the event of a Nonqualified Withdrawal from the Plan, for Alabama state income tax purposes, an amount must be added back to the income of the contributing taxpayer in an amount of the Nonqualified Withdrawal plus ten (10%) percent of such amount withdrawn. Such amount will be added back to the income of the contributing taxpayer in the tax year that the Nonqualified Withdrawal was distributed. Please consult with your tax professional.