HomeArticlesGive the Gift of Education, Save on your Colorado Income Tax!

With the holiday season quickly approaching parents and grandparents are perusing catalogs, searching stores and shopping online for the perfect gifts for family members. Real, tangible gifts are appreciated by the recipients but if you have extra money to spare, this could be the optimum time to give the gift of education. Start or add to your family’s 529 college funds. My recommendation is to start funding these education 529s when a child is born so the money will continue to compound until a child is ready to go off to college. Many parents with newborns or young children frequently feel they are unable to start these funds for their children but even a small amount like $250 annually will reap lots of rewards. As incomes increase so will your contributions and surprisingly there is a great feeling knowing you’ve started the process. Attending college is costly even at our local Colorado schools and before you know it your child is 18 years old. Grandparents love gifting too so consider small tangible presents for the children and a substantial contribution to their 529s. The added benefit, in addition to the funding of a college education for your family, is the annual allowance of a tax deduction on your Colorado State Income Tax.

There are many different 529 plans available to customers. It’s worth comparing to find the one that invests according to your personal financial strategies. In Colorado CollegeInvest is the most popular. Their motto “We Help You Get There” exemplifies the need to think about your children and grandchildren’s futures considering the cost of college and knowing future costs will continue to escalate. If you’re contributing to these education funds you are allowed to gift a maximum of $14,000 per child annually. Also, once a year you can make changes to the way funds are invested.

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