As we approach year-end, don’t overlook the State tax deduction/credit for contributions to a 529 plan. Contributions, including rollover contributions, to an Alabama 529 plan of up to $5,000 per year by an individual, and up to $10,000 per year by married taxpayers filing jointly who each make their own contributions, are deductible in computing Alabama taxable income.

Generally, a 529 can be applied to qualified higher education expenses incurred by the account beneficiary in the year of the withdrawal. Qualified expenses includes tuition, fees, books, supplies and equipment required for enrollment or attendance as well as room and board, this includes graduate or doctoral studies. Click below to visit Publication 970 that will help you determine which higher education expenses qualify: http://www.irs.gov.

 

Michael Guilsher                                                                                             December 2016

Senior Financial Advisor