Sunday, March 4, 2012

Save up for an Oregon College

Planning to let your child study in Oregon for college? It is important to prepare for his/her future. And you can do this by saving for a college education through a college plan. Fortunately, Oregon 529 College Savings Network exists to put up your dreams within reach. The Network offers annual state tax deduction, tax-free growth, and investment choices.

The Network has two kinds of college savings plan, each of this plan has a set of unique investment options and programs which provide federal tax advantages. The first plan is called “Oregon College Savings Plan” which can be purchased directly without having to use a financial advisor.

The Oregon College Savings Plan is apparently administered by the State of Oregon. With this plan, contributions or earnings used to pay for qualified higher education expenses will be made free from any state income tax in Oregon and the federal.

But contributions to the Plan are only deductible up to an annual limit. A deduction limit is indexed every year for inflation. For the past year, the allowable annual tax deduction is $4,240. This comprises all contributions made by the taxpayer to all Network accounts which include accounts in the Plan.

But the plan will help reduce the taxable value of your estate. Contributions and gifts from the account owner to the beneficiary, will most probably qualify for an annual federal gift tax exclusion amounting to $13,000 per donor, per beneficiary.

The plan offers more flexible features. Anyone can apply for the plan. If you’re the parent, grandparent, relative, or even just a friend who is a US citizen or a resident alien, you may open an account as long as you are at least 18 years old. You need not be residing in Oregon State to contribute for the savings plan on behalf of a beneficiary. But then, you might as well consider your own state’s plan first to avail of the tax advantages they offer.

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