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New qualified expenses for qualified tuition programs - 529 Plans
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Here's another tax update brought to you by the "stimulus bill" or American Recovery and Reinvestment Tax Act of 2009.
The popularity of state sponsored College Savings Plans or 529 Plans is growing and with this little nugget added to qualified expenses, you can see why they are so popular.
In addition to tuition, fees, books, supplies and room and board if the beneficiary is at least a half-time student, the stimulus bill added computers, certain computer equipment and software and services. Many colleges and universities require students to arrive the first day of school with a computer and now, the expenses associated with that requirement are eligible to paid for through a 529 plan.
For Maryland taxpayers, you can save on taxes while you save for college. You can deduct up to $2,500 of contributions per year, per account from your Maryland adjusted gross income for each of your beneficiaries. So a married couple filing a joint return can deduct $5,000 of contributions per year if each taxpayer opens one account for a beneficiary.
More information on the Maryland 529 plan known as the Maryland College Investment Plan can be found at the following websites:
College Savings Plans of Maryland
What's New in Qualified Tuition Programs or 529 plans
If you like this article you may also find the following of interest:
Tis the season for college savings plans and 529s
Should I save for Retirement or College first?
Tom Taylor, CPA is a fee-only, independent Financial Planner and Certified Public Accountant and can be contacted at Thoma Capital Management or Taylor & Company in Towson, MD. He is a member of NAPFA and the MACPA and AICPA.
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