Welcome to DOR's Tax Talk Blog
Tax Talk is a weekly blog published each Wednesday by the Indiana Department of Revenue (DOR) that discusses tax tips, DOR programs, and helpful information for tax preparers. During tax season blogs are posted on both Mondays and Wednesdays.
Most Recent Blog Posts
Five Steps to Maximize Your 529 Plan
September 12, 2018
Like saving money? Who doesn’t! So, how about learning how you can save money on your child’s future education?
By creating a 529 plan, parents and other family members can contribute to education costs. The 529 tuition plans will grow each year and the contributions are not taxed. Hoosiers can get a tax credit each year by making eligible contributions. However, there’s more benefits to 529 plans than just the tax credit.
Here are five tips to help you maximize your 529 account’s potential:
1. Your 529 plan can pay for more than just college. As of 2018, federal law allows withdrawals up to $10,000 per year per student for tuition expenses in connection with enrollment and attendance at an elementary or secondary public, private or religious school (K-12 tuition).
2. Open a plan as soon as possible! It takes as little as $10 and 15 minutes to open an account. Watch the money grow exponentially as it’s invested.
3. Get help from family. Grandparents and other family members who plan on helping pay for school can open their own 529 accounts and get the same tax benefits as parents. Instead of another toy, suggest that friends and family members give the gift of education by making one-time contributions to the child’s 529 plan via Ugift.
4. Contribute as much as you can. Indiana taxpayers (resident or non-resident, married or individual), are eligible for a state income tax credit of 20 percent of contributions to eligible accounts, up to $1,000 credit per year.
5. Review and update your Upromise account. Upromise helps you save by earning rewards on shopping, dining, and travel. These rewards can be automatically deposited into your child’s 529 account or used to pay on student loans balances. Did you get a new credit or debit card with a chip this year? Make sure it and your loyalty cards are linked to your account. Every dollar counts!
A few minutes now can put you ahead of the class when it comes to college savings.
Read more about 529 plans on the Indiana Education Savings Authority website.
Back to School Can be a Busy Time of Year! Let DOR Help You
September 5, 2018
Back-to-school time can be one of the most expensive seasons for many Hoosier families. Even though this can be a huge stress, you’re in luck! Did you know, Indiana offers education related deductions and credits to put money back in your pocket?
Below are education related deductions offered by Indiana each year:
Education Expenses Deduction
You may qualify for a deduction based on education costs paid for each dependent enrolled in a K-12 private school or homeschool. These costs include tuition, fees, textbooks and even school supplies. If eligible, the deduction is $1,000 per qualified dependent.
School Scholarship Tax Credit
A School Scholarship Tax Credit is available for individuals or corporations who donate to scholarship-granting organizations (SGOs). While there are no limits to how much a donor can contribute, the entire tax credit program cannot award more than $14 million in credits during the fiscal year.
Indiana CollegeChoice 529 Investment Plan Tax Credit
When you contribute to a CollegeChoice 529 education savings plan, you get a 20 percent state credit for contributions made during the year. Visit the Indiana Education Savings Authority website for more information on this tax credit.
Tax Credit for College Donations
Making a contribution to support your Indiana college of choice could make you eligible for up to 100 or 200 dollar credit when filing your state tax return. Contributions can include cash or other items such as a rare book, artwork or land. Itemizing your deductions on your federal return could potentially make the dollar amount higher. Be sure to keep your receipt/letter from the institution.