Image by Flickr user ydhsuImage by 20080809class.jpg Trying to save some cash in college? This tax loophole might be an interesting tactic.
The state Future Scholar program, designed as a college savings plan, has an interesting other side in that you can get a tax deduction on any funds you put into it, no matter when you take the money out, The Post and Courier reports. As the newspaper's David Slade writes, one of things that the program doesn't include is a time-minimum on funds put into it, so if put cash in, you can take it out any time without having to pay taxes on it.
Pretty clever, right? Well, the money does have to be used for higher education costs, so you couldn't just go buy that Jet Ski that you've been wanting (for a marine biology class, maybe?), but it could save parents and students some pretty big money, over the course of a four-year college education (or five years, as is becoming more common, it seems ...).
From The Post and Courier:
For someone facing a $10,000 bill for tuition, or room and board, the tax break would mean a savings of $700. Over the course of four years of college, the tax break could be worth thousands of dollars.
If you're interesting in signing up for the program, the state's Future Scholar 529 College Savings Plan Web site is the place to look for more information. An interesting little note in the corner of the site, though: Funds put into the program aren't insured, may lose value, and come with no government or financial institution guarantees ... So there is some risk involved.