College Savings Iowa 529 Plan

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Iowa 529 College Savings Plan

College Savings Iowa 529 Plan

A College Savings Iowa 529 Plan account includes benefits such as earnings that grow Federal and Iowa income tax-deferred, and as long as the earnings are used to pay for qualified higher education expenses are also Federal and Iowa Income tax free. You may also be eligible for a Iowa state tax deduction of up to $2,811 for a single taxpayer and $5,622 on a joint return for each beneficiary, up to a total of 11,244 per year.

You can open a College Savings Iowa 529 Plan with as little as $25 and there is no maximum contribution, other than the upper limit of the account is $320,000. Of course, you would need to pay attention to gift tax limits. You could contribute up to $65,000 in one year ($130,000 for joint filers) and treat it as being spread over 5 years for Federal gift tax exclusion purposes. For more information on the Iowa 529 Plan, visit the website at

One alternative of the Iowa 529 Plan includes four age-based portfolios ranging from aggressive to conservative which all shift allocations as the beneficiary grows towards college age. Since the age-based portfolios don't always match up with your desired choices, there are also nine fixed allocation portfolios, ranging from very aggressive to very conservative (money market). The difference between these and the age-based portfolio is that these do not change unless you switch to another portfolio. There are no guarantees with Iowa 529 funds and your investments could go down in value, should the markets not be favorable. You should also check with a financial advisor and tax advisor to see if a 529 investment is right for you.

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