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Facts About Louisiana's 529 Plan

By    |   Wednesday, 20 May 2015 12:11 PM

Saving for college can be a daunting task in today's economy and with the escalating costs of higher education, but there is a way to tuck away a few extra dollars so that college is within reach – in Louisiana it is called START, a 529 savings program. The START, or Student Tuition Assistance and Revenue Trust, savings program is that state's version of a 529 plan, according to Savingforcollege.com.

The 529 tax-advantaged savings plan is authorized by the IRS and legally known as a "qualified tuition plan," which is sponsored by states, state agencies or educational institutions. They may differ from one state to the next on what they offer and entail, according to the U.S. Securities and Exchange Commission.

Additionally, 529 plans come in two forms: pre-paid tuition plans and college savings plans. Every state and the District of Columbia sponsor at least one type of 529 plan, as do private colleges and universities.

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Here are some facts about START to consider:

1. START is a 529 Qualified Tuition Plan under the Internal Revenue Service code and is administered by the Louisiana Office of Student Financial Assistance and is directed by the Louisiana Tuition Trust Authority, or LATTA. An Education Savings Account may be opened for a named beneficiary by anyone, including legal entities, if they are legal residents of Louisiana.

2. Account owners can save at their own pace as they can afford to
while still having their investment professionally managed. As an incentive to save more, the state will annually match a 14 percent of the deposits made, depending upon the category the account has been classified under and the federal adjusted gross income of the account owner.

3. There are seven investment options that range from conservative to aggressive. A deposit in the fixed earnings portion of options is guaranteed by the state. Up to $2,400 per year per account may be excluded from Louisiana state taxable income, and any unused exclusion may be carried forward into new tax years.

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4. The account can be used to pay for the beneficiary's higher education costs
at any qualified college or university nationwide, and at Louisiana Technical College and state-approved proprietary schools. The START Saving Program is fee-free on money invested in mutual fund offered by the Vanguard Group.

5. START donations are exempt from federal taxes. Deposits can be made through automatic bank debit, payroll deduction or direct payment lump sums with no limit on frequency and a minimum deposit of only $10. Money can also be used to pay higher education expenses such as tuition, room and board, books and supplies.

6. Participants must be United States citizens or resident aliens who live in Louisiana when they open the account and must be at least 18 years old. Legal custodians and legal entities also can open accounts for a named beneficiary. Account caps are set at $313,040.

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Saving for college can be a daunting task in today's economy and with the escalating costs of higher education, but there is a way to tuck away a few extra dollars so that college is within reach - in Louisiana it is called START, a 529 savings program.
529 plan, facts, louisiana
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2015-11-20
Wednesday, 20 May 2015 12:11 PM
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