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:

1. An old non-Alabama sponsored 529 savings plan with at least $5,000 of rollover eligible balances.
2. A new Alabama sponsored College Counts 529 plan. You can open it online here: www.collegecounts529.com
3. 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.

Credit Unions are member (you, the depositor) owned rather than investor owned like commercial banks. Fees for deposit accounts and loan services are, in my experience, cheaper than similar commercial bank offerings. Lack of ATM access and few physical locations previously reduced their appeal.

With today’s widespread direct deposit use, electronic payment methods, and ATM fee rebates this is no longer the case. Birmingham is especially blessed with a vibrant credit union market. As you evaluate the different credit unions, consider using a member of the CU service center network which gives you access to 1000′s of branches nationwide. Members can make deposits, withdrawals, transfers, loan payments, and balance inquires at most locations.

Here is a listing of the CU service center credit unions in Alabama:

Alabama Credit Unions

Depositor beware! Opening a new account allows banks and credit unions to put 9 business day hold on any check you deposit. Even those locally drawn and cleared. The Reg CC rules governing new accounts need an update since checks now clear much faster. You should be fine after 30 days, so open your account with a small deposit and mark you calendar before making the complete switch. If you receive direct deposits, this should not affect you since those are treated like cash.

1. Defined-contribution (DC) plans are where employees receive contributions to their account which can then be invested in stocks, bonds, or cash. 401k, 403b, and RSA-1 accounts are examples of (DC) plans. These plans are very similar to Individual Retirement Accounts (IRA’s)

2. Defined-benefit plans are where the employer saves on an employees behalf and guarantees benefit based on income and/or years of service or guarantees a contribution and investment return. The latter being known as cash balance plans. At retirement IRA’s can hold the lump-sum value from pension plans.

All Wesban Advisors are CERTIFIED FINANCIAL PLANNERS (TM) and NAPFA Registered Financial Advisors.