Friday, February 23, 2018

Billy Long: 529 Savings Plans are helpful tools for parents, students

(From Seventh District Congressman Billy Long)

In 1985, the average cost for a degree from a four-year university was $11,548 a year. As of 2015, that number had increased to $25,409. With that being said, some parents are paying for education before their child sets foot on a college campus. With private schools, books, technology and supplies, parents are forking over thousands of dollars throughout their child’s K-12 years. I, like many of you, know firsthand how these costs can add up. Last December, President Trump signed the Tax Cuts and Jobs Act into law. This bill not only promised lower taxes, but it also expanded benefits for hard-working taxpayers, such as 529 Savings Plans. These higher education savings plans are now expanded to cover not only higher education costs, such as tuition, fees and room and board, but K-12 education costs, such as private school tuition, books and supplies.

In 1996, Congress created 529 Savings Plans to incentivize parents to save for their child’s education. These plans are operated by either states or educational institutions. Although contributions made to 529 Savings Plans are not eligible for federal income tax deductions, some states offer a state income tax perk. Many states, including Missouri, allow an individual to deduct up to a certain amount of their 529 contributions when filing state income taxes. In Missouri, those numbers are $8,000 for an individual and $16,000 for married couples filing jointly. However, any earnings gained are exempt from both state and federal income taxes. For example, if a parent deposits $2,000 in a 529 that grows at 5 percent, at the end of the year the parent will have made $100, which will not be taxed.

However, there are limits on how much money parents can contribute to these savings plans. To avoid being hit with the federal gift tax, a single tax filer is only able to contribute up to $15,000 a year to a plan or $30,000 for married couples filing jointly.

Now that these plans have been expanded to include K-12 education, parents can invest in their child’s education even earlier. A parent now has the choice to withdraw up to $10,000 a year to cover tuition, at both private and religious schools, or fees connected to enrollment or attendance. With the average cost of private school being $10,302 a year, having the ability to dip into this money to cover those costs is crucial. And that’s just tuition. That number doesn’t include books, fees, technology and other items.

529 Savings Plans are a helpful tool for both parents and students when it comes to affording a quality education. The expansion of these plans allows parents more choice and control over their child’s education, which they rightfully deserve.

7 comments:

  1. Anonymous6:33 AM

    Is that part of your genius tax breaks for the rich? Tell the middle and lower class to save for your child's education? Especially since, now that you have taken funding from education, tuition will increase. But, hey, that's the Repugnican way. Dumb down 'Murica so the uneducated will be easier to brainwash into believing your lying hypocritical rhetoric. Go back to your trough Billy blob. By the way, tell all the lower and middle class that you did them a favor by giving them their miniscule tax break. Now they can use THAT for saving for their child's education instead of buying food or insurance for them. You are a disgusting pile of ........repugnican. If you care so much that you gave them this little saving suggestion, why don't you donate all your lobbyist bribes to help fund education or maybe help with their insurance or buy yourself a conscience.

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  2. Anonymous7:44 AM

    Consider the following statements:
    - According to the Missouri Department of Economic Development the Total Average Wage in Jasper County was $39,582; Newton's was $33,870.
    - With a 529 "a single tax filer is only able to contribute up to $15,000 a year to a plan or $30,000 for married couples filing jointly." (Billy Long)
    - "Billy Long: 529 Savings Plans are helpful tools for parents, students" (Header)

    You folks able to use this "helpful tool"?

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  3. Anonymous11:10 AM

    Not a Long fan but instead of hurling insults you need to look into the math. I started putting $25 per month into a 529 plan when my child was born. Later in life I was able to put 30, then 40. When he graduated last yeah we had accumulated around $30000. 18 years of investing small amounts with decent returns have help offset the costs of college quite a bit. And no I don't make a lot of money. When we started my wife stayed home with our child and I made $30000/yr. Just be smart.

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  4. 11:10

    You are to be commended; and saluted for your honesty, and willingness to keep the knee jerk politics of Congressman Long’s enemies out of the conversation

    Harvey HUTCHINSON 303-522-6622 voice&text

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  5. Anonymous4:09 AM

    You ever asked yourself why Billy Long has so many enemies Harvey?

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  6. Lying crooked Hillary’s sore losers

    Harvey HUTCHINSON 303-522-6622 voice&text

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  7. Anonymous6:27 AM

    Lying crooked russian trump is the treason for the season of chaos in Washington but here in missouri little harvey is happy because there is an "R" in the whitehouse. Doesn't matter that the orange sack of excrement is destroying democracy, at least he has the "R" beside his name. Keeping the republican knee jerk party before country politics in place to take this nation down.

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