529 College Savings Plans

It's not too late to make a contribution to a 529 College Savings Plan and possibly reduce your state income tax bill (depending on your state and income situation).  

One thing I like about my home state's North Carolina 529 College Savings Plan is the ability to utilize very low cost Vanguard Index funds.  The one minor disappointment is the NC 529 Plan charges an additional 0.25% for administrative expenses, but even that amounts to just $12 for each $5,000 invested.  The second thing I like about the NC 529 Plan (for North Carolina residents) is that there are no income limitations in order to receive a state income tax deduction.  

(see the NC Department of State Revenue statement on the NC 529 College Savings Plan by clicking here)

A married couple in the highest North Carolina tax bracket (7.75% for taxable income over $100,000) can save up to $387 in North Carolina state income taxes with a contribution of $5,000 to the North Carolina 529 College Savings Plan each year.  I view this as the state of North Carolina paying me $387 each year for planning for my children's college education.


(see the tax advantages of the NC 529 College Savings Plan by clicking here)

Contributions to a 529 College Savings Plan grow tax-free and can be withdrawn tax-free if used for qualified higher education expenses (such as tuition, room and board, and any required equipment).  

(see answers to most questions about the North Carolina 529 College Savings Plan by clicking here)

Not all state 529 plans are the same.  To get started in your state, you might try browsing Clark Howard's 529 Guide by clicking here.