In Illinois and other states, 529 college savings plans are tax deductible at the state level. This means you can get back 3.75% on 529 contributions in tax savings in Illinois. If you put in the maximum $20,000 for married couples ($10,000 for singles), you can save $750 in taxes.
There is no time limit for keeping the money in a 529 college savings account. So, deposits made in December can be used for tuition, room & board and other qualifying expenses the same month or later. This strategy works for parents, grandparents, aunts & uncles – basically anyone who would like to contribute toward college expenses through a 529 account. Unlike IRA contributions which give you until April 15 of the following year, 529 contributions must be made by December 31 to apply to the current tax year.
Note: Golden Trail Advisers does not charge the annual 0.5% fee for its investment management clients.