529 Savings in Idaho; Not Just for College Anymore
A similar concept to a 401k, but for education, money is contributed to the account; is invested and has the potential to earn additional money; the account holder decides when to remove funds to pay for education expenses. In Idaho, education expenses are a pretty big umbrella that covers K-12 and postsecondary options.
How Do I Start?
Saving for college—especially through a 529 college savings plan—can be simpler than you might think. Each state offers their own 529 programs. Families can work directly with their state program or can talk to a financial advisor or bank for options. In Idaho, the official program is called IDeal – Idaho College Savings Program, IDeal for short. IDeal is the only 529 program that offers Idaho tax payers state tax incentives including a state tax deduction for individuals and a state tax credit for employers. Families and employers must work directly with the IDeal Program to qualify for these tax incentives.
When Should We Start Saving?
In a perfect world, families start saving for college when a student is very young. But while it’s never too early to start saving, it’s also never too late. Even if your student is in high school already, putting aside money can still help you save for school and provide other perks, like tax benefits.
We Can Only Save a Little Bit Each Month. Is That Okay?
Definitely. Every little bit helps! Even small deposits add up over time. Additionally, programs like IDeal offer the option of having money automatically deposited into your college savings account each month to make the process even easier.
Contributions to your college savings account can also be a great gift idea for birthdays, graduations, and other important milestones.
What Can the Money Be Used for?
529 plans have always been designated for college tuition, required fees, books, room and board, and dozens of other required expenses. It is important to note that the IDeal 529 Savings Program can be used to pay for these types of expenses in any state.
However, the Idaho legislature also expanded the uses for IDeal 529 plans to include trade schools and two-year colleges or programs. There is no age limit to using the savings account and all donors (even grandparents and friends who contribute to a student’s IDeal 529 account) will receive an Idaho state tax deduction for their contributions. IDeal 529 funds even cover tuition for K–12 education, up to $10,000 a year.
IDeal plans can also pay for:
- Apprenticeship costs for programs certified and registered with the U.S. Department of Labor
- Student loan repayment, up to $10,000 over a lifetime of the beneficiary
The best part(s)—other than a savings account that has the potential to literally grow money—are the tax benefits; for the account holder and anyone who touches it. For instance, if an Idaho business directly contributes to their employees’ IDeal 529 accounts the employer can earn up to $500 in tax credits, per employee.
Remember to talk to your financial professional and claim all perks surrounding your 529 savings account during tax season. You can even opt to direct deposit your Idaho Tax refund into your IDeal account if you wanted.