Key Tips for Tax-Advantaged Giving This Holiday Season

The holidays are approaching, and we believe there are many excellent reasons to give the gift of education. It's a smart and powerful investment that can pay off in huge ways when your child is older - from planting the seeds of education goals to setting them up for a lifetime of higher earnings potential.

But another advantage in giving the gift of education lies in the tax advantages available. To help you out, we consulted the experts and came up with these helpful tips for both parents and grandparents:

Parents

• Open a Florida 529 Plan. The beauty of the Florida 529 Prepaid Plan and the Florida 529 Savings Plan is that your money can grow while not being subject to federal income tax.
• The Florida 529 Prepaid Plan locks in your child's future tuition and fees at today's prices, which are guaranteed by the state of Florida. These flexible plans can serve your student at one of Florida's 12 public universities and 28 state colleges or even at an institution out of state. They also work great alongside scholarships and financial aid to help cover all qualified educational expenses, including tuition, fees, housing, meal plans, books and supplies. The Florida 529 Savings Plan allows parents to choose their own investment strategy and save at their own pace. This plan travels with your student and can be used to pay for tuition, fees, housing, meal plans, books and supplies at traditional colleges and universities, as well as trade and technical schools nationwide.
• Both plans also allow you to share gifting links with loved ones who want to contribute in lieu of toys or other gifts.

Grandparents

• Set up a Florida 529 Prepaid Plan or 529 Savings Plan in your grandchild's name. The 1-Year University Plan is perfect for this scenario, as multiple family members can each contribute to the same child - "stacking" 1-Year Plans to build a full four years of future tuition coverage at today's prices. And with Prepaid Plans starting at just $34/month, this is a way to affordably gift a grandchild with something lasting and life-changing. New tax rules also allow grandparents to set up college accounts without worrying that it will impact a student's financial aid eligibility. And unused dollars in a 529 Savings account after 15 years can be rolled into a Roth IRA retirement account - so as a grandparent, you can plant the seeds for their college and their retirement.
• Utilize Gift Tax Exclusions for Cash Gifts. If you're in the mood to gift some cash this year, we say go for it. Cash can be a great way to help young parents seed new accounts for college expenses. Just know the federal limits! This year's limit is $18,000 per recipient to avoid paying the federal gift tax.
• Pay Tuition Directly to College or University. Perhaps you want to help out a grandchild who's currently pursuing a college degree. By writing your check directly to the educational institution on behalf of your student, you can avoid paying the federal gift tax - even if the amount you're paying is higher than the 2024 limit of $18,000.

No matter what the list to Santa says, this time of year is a great time to invite friends and family members to contribute to your child's post-secondary educational and career goals.

Have more questions? We've got answers! Explore our Frequently Asked Questions to learn more about our Prepaid Plans and Savings Plan. And click here to start your savings now!