Baton Rouge: With escalating costs of higher education on the long-term horizon, State Treasurer John Kennedy suggests that one of the best gifts to give a child this holiday season is an investment in a Louisiana START 529 college savings account.
"The holidays are the perfect time to give a child the meaningful gift of a Louisiana START account that will impact their education in the years to come while maximizing tax benefits for the contributor in the short term," says Treasurer Kennedy.
START accounts can be opened on behalf of a future student with an initial investment as little as $10. Invested funds grow over time with choices between fixed income and equity investment options that are managed by investment professionals at the Louisiana Department of the Treasury. There are currently over 44,000 Louisiana START accounts and $405 million in deposits.
When the time comes for the student to withdraw money for educational expenses, START funds and their earnings can be used at any accredited college or university for tuition, room and board, books, fees and more. There are no state or federal taxes on those disbursements.
When opening a START account on behalf of a child, the investor can exempt up to $2,400 in deposits per account per year from income reported on their state tax returns. Married couples filing jointly can deduct up to $4,800 in deposits. On top of that, the state pays a match on deposits ranging from 2 to 14 percent, depending on factors including the investor's income, which is effectively a guaranteed investment return.
"A START account is not only a generous and wise gift for a loved one, it also happens to be one of the best and last solid tax breaks available to families," says Treasurer Kennedy. "Today is the day to make opening a START account an important part of your Christmas shopping list."
For more information on Louisiana's START Savings program, contact the Louisiana Office of Student Financial Assistance (LOSFA) at 1-800-259-5626, ext. 1012 or visit http://www.startsaving.la.gov/savings/index.jsp