529 Plans - A Great Tool for College Savings
One of the best ways to save for college is through a Section 529 college savings plan. Recent tax and regulatory changes are making these savings accounts an even better choice. The plans, named for a section of the U.S. tax code, are tax-favored programs set up by states to help families save for tuition, books, and other such expenses related to going to college. Savings in 529 plans grow tax-deferred, and withdrawals are tax-free when used for educational expenses.
Now, as reported by ABC News, the plans are getting even better as Maine and Kansas appear to be at the head of a trend by giving state income tax breaks to families which make a contribution to any 529 plan, even those sponsored by other states. If your family has not yet started a 529 plan, now is the time.
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