Key Tips for Tax-Advantaged Giving This Holiday Season
The holidays are approaching, and we believe there are many excellent reasons to give the gift of education. It’s a smart and powerful investment that can pay off in huge ways when your child is older – from planting the seeds of educational goals to setting them up for a lifetime of higher earnings potential.
But another advantage of giving the gift of education lies in the tax advantages available. To help you out, we consulted the experts and compiled these helpful tips for both parents and grandparents:
Parents
The Florida 529 Prepaid Plan locks in your child’s future tuition and fees at today’s prices, guaranteed by the state of Florida. These flexible plans work for one of Florida’s 12 public universities and 28 state colleges or even an out-of-state institution. They also pair well with scholarships and financial aid, covering tuition, fees, housing, meal plans, books, and supplies.
Open a Florida 529 Plan. The beauty of the Florida 529 Prepaid Plan and the Florida 529 Savings Plan is that your money can grow while not being subject to federal income tax.
- The Florida 529 Prepaid Plan locks in your child’s future tuition and fees at today’s prices, guaranteed by the state of Florida. These flexible plans work for one of Florida’s 12 public universities and 28 state colleges or even an out-of-state institution. They also pair well with scholarships and financial aid, covering tuition, fees, housing, meal plans, books, and supplies.
- The Florida 529 Savings Plan allows parents to save at their own pace with a customizable investment strategy. This plan travels with your student and can fund expenses at traditional colleges, trade schools, and technical institutions nationwide.
Both plans make it easy to share gifting links with loved ones who want to contribute in lieu of toys or other gifts.
Grandparents
- Set up a Florida 529 Prepaid Plan or Savings Plan. Grandparents can open a 529 Plan for a grandchild, creating a lasting gift that grows tax-free. The 1-Year University Plan is especially grandparent-friendly, allowing multiple family members to contribute to the same child’s education by stacking plans to cover up to four years of tuition. With Prepaid Plans starting at just $34/month, this is an affordable way to give a truly transformative gift. Recent tax rule changes also mean 529 Plans set up by grandparents won’t impact a student’s financial aid eligibility, and unused funds can be rolled into a Roth IRA after 15 years, planting seeds for college and retirement.
- Utilize Gift Tax Exclusions for Cash Gifts. Cash gifts can help parents kickstart college savings accounts. For 2024, you can give up to $18,000 per recipient without incurring federal gift taxes.
- Pay Tuition Directly to the Institution. If you’d like to support a grandchild already in college, paying tuition directly to the school lets you bypass the gift tax, even if the amount exceeds $18,000.
Watch the Video: College Savings – The Greatest Gift from a Grandparent
For grandparents looking to make a difference, check out our video, College Savings: The Greatest Gift from a Grandparent. Hear from two financially savvy grandmas who share why saving for higher education is the most rewarding gift they’ve given their grandchildren. You’ll also learn about different saving options, costs, and tax advantages – making it easy to start a tradition of impactful giving this holiday season.
No matter what your child’s list to Santa already includes, this time of year is perfect for inviting friends and family to contribute to your child’s future.
Have more questions? We’ve got answers! Explore our Frequently Asked Questions to learn more about our Prepaid Plans and Savings Plan. Ready to start saving? Click here to begin today!
