Tax Tip From MEFA: Send Your Tax Refund Directly to Your 529
28 March 2024 - 3:54PM
Business Wire
Using a tax refund to add money to a 529 college savings account
is one of the best ways to boost college savings, and it’s possible
to transfer a tax refund directly into a 529 account. This is one
of several tax season tips that can help families save for college,
advises MEFA.
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Tax filers can use IRS Form 8888 to direct their refunds into up
to three separate accounts, including a U.Fund 529 college savings
account. File Form 8888 with your federal tax returns and the IRS
will do the rest.
“This is a great way to save money that you didn’t have
yesterday, and won’t miss, and watch it grow in your college
savings account,” said Jonathan Hughes, host of the MEFA Podcast, a
weekly 30-minute conversation about college and career
planning.
This tax season, families should also consider the following
tips:
- The Massachusetts college savings tax deduction allows joint
tax filers to deduct up to $2,000 and single filers to deduct up to
$1,000 on state tax returns for funding a Massachusetts college
savings plan, such as the U.Fund or the U.Plan Prepaid Tuition
Program.
- Consult a professional tax advisor to see if there are other
education-related tax benefits such as deducting expenses for
daycare, preschool, kindergarten, after-school programs, and
camps.
- Parents should evaluate their family finances and consider
increasing contributions toward your U.Fund or U.Plan account, or
open an account to begin saving.
MEFA’s online knowledge base includes articles on planning,
saving, and paying for college, including the following article
about Tax Forms Related to Higher Education.
If you’re interested in learning more about college savings
options and strategies, visit mefa.org/college-savings-plans.
MEFA is a state authority, not reliant on state or federal
appropriations, established under Massachusetts General Laws,
Chapter 15C. MEFA's mission, since its founding in 1982, has been
to help Massachusetts students and families access and afford
higher education and reach financial goals through education
programs, tax-advantaged savings plans, low-cost loans, and expert
guidance. All of MEFA's work aligns with the ever-present goal to
support the independence, growth, and success of Massachusetts
students and families. Visit mefa.org to learn more or follow MEFA
on Twitter @mefatweets, Facebook at mefaMA, LinkedIn, and
Instagram.
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Lisa Rooney Public Relations Manager, MEFA (617) 224-4838
lrooney@mefa.org