Tax laws have changed on college savings plans in Oregon.
If you pay Oregon income taxes AND are interested in savings for children or grandchildren’s education goals, here are some things you need to consider:
- The deduction for this year is $2,435 for a single taxpayer or $4,865 for a couple in 529 plans.
You can contribute five times this year’s limit and still deduct the same amount this year carrying forward the four extra payments for tax deductions in the next four coming tax years.
- The ability to pay five years and deduct that amount over the next five years ends with payments received on or before December 31 of 2019.
- Next year you can get a tax credit up to $300, depending on your income you could have to invest as much as $6,000 to get the tax credit. But the maximum tax benefit for next year is $300 on your state taxes.
- This year the tax benefits depending on your tax bracket could be as much as 9.9% times $4,865 or $481.63 depending on your tax bracket.
- If you make the extra contributions this year so we can have deductions in the coming years, you can also receive the tax credit on top of that for the next four years if contributing while you are receiving the tax deduction for this year’s contribution.
- So, if you are highly motivated, you might want to put $24,325 away in the 529 plan this year and carry those tax benefits forward for the next four years and then get the maximum tax credit possible for monies you put away in the coming years.
If this is something you’re interested in, let us know. But we would have to take action quickly to facilitate taking advantage of this opportunity.
Contact us today using the form below or call 503-257-6969.
Click here to visit the Oregon college savings website for more information.