Ring in the New Year with Tax Savings When You Open or Contribute to an MNSAVES College Savings Account
It might be hard to think about taxes during the holiday season, but families can take advantage of significant tax benefits when enrolling or contributing to an MNSAVES account by December 31, 2024. Investing in MNSAVES – Minnesota’s 529 College Savings Plan – can help families potentially save money each year in taxes.
MNSAVES offers a triple tax benefit:
- Account owners may qualify for a state tax deduction of up to $3,000 for married joint filers or $1,500 for those filing as single
- Tax-deferred growth on any earnings
- Tax-free withdrawals when used for qualified education expenses such as tuition, fees, room and board, books, computers and more
Those who prefer utilizing a tax credit instead of a state tax deduction, may be eligible for a tax credit of up to $500 (subject to phase-out based on certain federal adjusted gross income thresholds).
“By minimizing taxes, you not only keep more of your hard-earned money, but you also have the opportunity to grow your college savings faster,” said Jim Mandler, senior marketing manager for MNSAVES. “This can mean a bigger financial head start for your child or grandchild, setting them up for success in their educational journey.”
With student loan debt on the rise, saving for college is more important than ever. According to the Pew Research Center, Americans owe about $1.6 trillion in student loans as of June 2024. That’s 42% more than what they owed a decade earlier.1
“The numbers can seem overwhelming when you look at college tuition and student loan debt,” Mandler stated. “The key is to start saving early when your children are young. Get into the habit of contributing whatever you can afford on a monthly basis. Start small and grow your account over time – every little bit helps down the road.”
Funds from an MNSAVES account can be used to pay for tuition at colleges, universities, technical schools, apprenticeship programs and graduate schools in the U.S. and many abroad.
Individuals can set up an MSAVES account in as little as 15 minutes with $25 and start saving for college. For more information about MNSAVES or to open an account, visit mnsaves.org. MNSAVES is also on Facebook, Instagram YouTube and LinkedIn.
About the Minnesota 529 College Savings Plan
The Minnesota 529 College Savings Plan (MNSAVES) makes it easier for families to save for higher education expenses. Funds saved can be used at eligible colleges and universities, community or technical colleges, apprenticeship programs and graduate schools nationwide and many abroad. In addition to tuition, funds may be used for certain room and board expenses, books, supplies or other qualified expenses.
