You have a few more days to make a contribution to the state-backed college savings plan and get a deduction on your 2005 state income taxes. State Treasurer Michael Fitzgerald’s office oversees the “College Savings Iowa” plan.
Fitzgerald says you put up to two-thousand-375 dollars for each child and deduct that amount for each child from your income tax. He says the contributions have to be postmarked by December 31st to qualify for a deduction this year. Fitzgerald says if you already have an account, it’s easy to check to see how much you’ve contributed.
He says you can call up your account on collegesavingsiowa-dot-com to see if you’ve contributed the maximum amount. Fitzgerald says your contributions have benefits beyond the state tax deduction. He says the money is invested professionally and grows tax-free from the federal government as well as the state.
Fitzgerald says the program has 12 options for investing. Fitzgerald says if you have a kid who’s getting close to graduating high school, you’ll want a more conservative plan for investing the money. If the child is a newborn, he says you’ll want an investment plan that has a higher risk, but a bigger return. Fitzgerald says the money can be used for a variety of expenses once the child turns 18.