Residents of Nevada looking to help loved ones put aside money for their post-high school education may want to start 529 plan.
The plans were named for the IRS Tax Code 26 U.S.C. § 529 that allows people to invest to pay for education and the income won't be taxed at the federal level.
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In addition, many states offer tax benefits to residents and don't tax the income resulting from the 529 plan. However, Nevada is one of seven states that does not have a personal income tax,
according to USA Today, so there is no need to provide a deduction. That opens the door for Nevada residents to consider out of state plans.
As the Internal Revenue Service reports, investors are not limited to investing in plans offered by their home states. It can make sense to stick with 529 plans in your home state to take advantage of tax breaks sometimes offered to residents. But since that is not an issue for Nevadans, they can look at plans offered by other states to choose the plan that has the best features for their financial situation.
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Nevada offers some benefits that residents may appreciate to keep them from choosing 529 plans operated by other states.
According to the state’s treasurer, they include the following:
1. No annual administration fee.
2. The Silver State Matching Grant, for families with an adjusted gross incomes of less than $74,999.
3. A low contribution level of only $15 per transaction.
4. The Ugift program that allows other family members and friends to contribute to the plan for special events.
5. A matching grant program available from the United Services Automobile Association.
6. Access to the Nevada College Kick Start Program.
All of these benefits can help provide the financial resources needed to begin a college education.
The Center for Social Development at Washington University in St. Louis reported that children with a savings plan in place are seven times more likely to attend college than someone who does not have funds available to them.
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