Happy holidays! Our homes are packed with family, our refrigerators are overflowing with tasty treats and our bank accounts are on fire! Many of us are occupied with celebrating the holidays but after all the merriment is complete and life is back on schedule, we will soon realize that tax time is just a couple months away.
But I have good news! Please do not miss the opportunity to lower your tax bill while raising the aspirations of the children in your life. Invest in a Learning Quest® account before Dec. 31, 2004 to enjoy a sizable tax deduction for 2004. It only costs $25/month or a lump sum of $500 to open an account if you live in Kansas. There is no enrollment fee and absolutely no annual fee for Kansans.
Learning Quest is the Kansas' 529-college savings program established by the State of Kansas, administered by the Kansas State Treasurer's office and professionally managed by American Century Investments. Learning Quest is a comprehensive education savings program with some of the most competitive features in the nation. It allows you to make contributions to invest for higher education and offers important advantages.
Kansas taxpayers can receive a state adjusted gross income deduction of up to $2,000 per child for 2004 ($4,000 if married filing jointly) on contributions to Learning Quest. This benefit is in addition to the federal and state tax benefits of tax-deferred growth and tax-free withdrawals for qualified educational expenses. Beginning January 1, 2005, the amount you can deduct increases to $3,000 per child per year ($6,000 if married filing jointly).
In addition to the tax benefits, 529 plans offer advantages over other college savings tools. For instance, the account owner, not the beneficiary, maintains control over the assets in the account. Additionally, there are no income limits, and the contribution maximums are high ($235,000 per beneficiary for Learning Quest).
Learning Quest also offers other tax advantages. Gift-tax benefits for 529 plans offer unparalleled benefits. Contributions to a 529 plan are completed gifts and are eligible for the $11,000 annual gift tax exclusion. Gift tax-free contributions of up to $55,000 ($110,000 for a couple) can be made by spreading the contribution over five years (this option is available every five years). Gifts can be excluded from the generation skipping transfer tax. For estate tax planning purposes, contributions reduce the account owner's estate, but the account owner retains control over those assets.
A Learning Quest account will benefit you and the children in your life. To find out more about the program, please visit www.kansasstatetreasurer.com or call 1-800-579-2203. Also be sure to register to win one of the two $5,000 Learning Quest accounts that will be given away. Entries are accepted until Dec. 31, 2004 and open to any U.S. resident.
Please have a safe and happy holiday season! I hope it is full of family, friends and laughter. It is an honor to serve as your State Treasurer. Please contact me if there is anything that I can do for you.
