Generations of Saving

There are a few simple steps you can take to help plan for your loved one’s future.

Children begin learning from those around them from the moment they are born, and they learn through repetition. When it comes to saving for college, it pays to start early and make repeat contributions. Even though whomever you are saving for may not attend school for many years, the best time to get started is right now.

 

SMART529 Select features different plans and investment options, so you can choose the one that’s right for you. Get started today with as little or as much as you are comfortable. There are no application fees or sales charges, so 100% of your investment goes to work immediately.

 

Plan Highlights

  • The account holder maintains control of the account - even once the beneficiary reaches the age of 18.
  • Withdrawals for qualified higher education expenses1 are free from federal income tax, as well as West Virginia personal income tax.2
  • Payroll Direct Deposit and the Automatic Investment Program are available to help keep savings plans on track.
  • Contributions made by December 31st each year can be used as a modification, reducing your federal adjusted gross income for West Virginia personal income tax purposes.

 

Legacy/Estate Planning

Giving your grandchild the gift of higher education may also help you reduce your estate and save on estate taxes. If a third party is the designated beneficiary on your SMART529 Select account, the value of the account will not be included in the donor’s estate for estate tax purposes. The only exception would occur if you are spreading a gift out over five years for gift tax purposes, in which case the gifts allocable to periods after your death are included in your estate.

 

Anyone can contribute up to $15,000 per year ($30,000 for married couples filing jointly) to a beneficiary's SMART529 Select account without gift-tax consequences. Contributions may be accelerated up to $75,000 ($150,000 for married couples) once per 5-year period without incurring federal gift taxes.3

 


 

1 Qualified education expenses include room and board, required supplies and equipment, books, tuition and fees.

2 Non-qualified withdrawals are taxable as ordinary income to the extent of earnings, and also may be subject to a 10% federal income tax penalty and a withdrawal charge. Such withdrawals may have state income tax implications.

3 Any additional gifts to the same beneficiary in that 5-year period would be subject to federal gift tax. If the donor elects to treat the gift as being made over 5 years, and the donor dies prior to the end of that 5-year period, the portion of the gift allocable to the period after the donor's death will be included in the donor's estate. Estate tax treatment may differ by state. Please consult your tax advisor for more information.

 

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