One way to save for your children’s or grandchildren’s college tuition is through a “529 Plan.” A 529 Plan allows for tax-free earnings on investments, and distributions from the plan are tax-free as long as the distribution is used for college expenses.
As an added bonus, Iowa allows a tax deduction for contributions to an Iowa 529 Plan (in Iowa it’s called “College Savings Iowa”). For 2010, you can deduct up to $2,811 per parent per child for contributions to a College Savings Iowa Plan. So a married couple with two kids could deduct up to $11,244 of contributions ($2,811 x 4).
Read more at the College Savings Iowa website.