Can a taxpayer claim a deduction in Iowa for contributions made to another state’s 529 plan? The short answer is no.
The rule is, you can take a deduction on your Iowa return of up to $3,239 (in 2017) per beneficiary. A beneficiary does NOT have to be your own child. I can be anyone, including yourself, or even someone who’s not related to you.
Iowa has changed a rule relating to when taxpayers can deduct contributions to College Savings Iowa (Iowa’s Section 529 Plan).
College Savings Iowa refers to a tax-advantaged way for Iowa residents to save for college expenses. It’s a type of 529 Plan, where money going into the plan is not tax deductible (for federal taxes) but money coming out not taxed as long as it’s used for qualifying expenses.
The term “529 Plan” is a generic name given to tax-advantaged savings accounts for college expenses.
All of these are actual questions from readers over the last couple of weeks. Q: What are boxes 18-20 on a W-2 for? A: Some cities levy an income tax. For example, New York City, many cities that have a professional sports team, and most cities and towns in Ohio. If you earned wages subject […]
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You can take tax-free withdrawals from a Section 529 college savings plan if you use the withdrawal to pay for college expenses. If you withdraw the money for other reasons, you’re taxed on the withdrawal and are subject to a 10% penalty. As a taxpayer learned in Tax Court on Thursday, this is true even […]
Nebraska is changing its 529 Savings Plan for college expenses, adding an investment option that will operate similar to a bank account. This option will allow people to shield their money from market losses. 529 plans are a great way to save for college expenses. No federal tax deduction is available for contributions to a […]
The amount of deduction you can take for contributions to a “College Savings Iowa” program has increased by $54 for 2011. The maximum deduction is now $2,865 per child, up from $2,811 in 2010. The deduction limit is per parent, per child, so a married couple with two kids could deduct up to $11,460 in […]