Without spending a penny*
Alabama lets you deduct contributions or rollovers to the state’s 529 college savings plan. A single filer can deduct up to $5,000 worth of contributions while joint return filers can double that amount.
Here’s what you need:
- An old non-Alabama sponsored 529 savings plan with at least $5,000 of rollover eligible balances.
- A new Alabama sponsored College Counts 529 plan. You can open it online here: www.collegecounts529.com
- Complete your rollover before year-end and claim the deduction on your 2011 taxes.
Best hurry. Year end processing slows everything down.
Don’t move more than the deductible amount. This way you can complete a transaction each year–and receive a deduction–until all funds are moved to the Alabama plan.
This is not the PACT plan nor is the old stinker managed by Van Kampen. The newer plan is one of the better available, especially considering the tax deduction. Be sure to setup the “Direct” plan versus the “Advisor” plan. While the former has fewer investment options it is less costly.
*As always check with your advisor to be certain this strategy will work for you.