START Program Provides Tax Deductions
“If you already have a START account, you can benefit from a state income tax deduction this tax year if you made deposits into the program by December 31, 2010,” said Treasurer Kennedy. “Refer to your Louisiana tax booklet to be sure you get your full deduction amount. If you haven’t invested in START yet, you can start saving now and will be able to take a deduction on next year’s state income tax return.”
START investors can exempt up to $2,400 in deposits per account per year from income reported on their state tax returns. For married couples filing jointly, the exemption from income can be up to $4,800 in deposits. If account owners are unable to make $2,400 (or $4,800) in deposits in one year, they can carry forward unused portions to subsequent years.
START is free from state and federal taxes from beginning to end. When it is time to withdraw money for educational expenses, individuals do so without paying state or federal taxes on their disbursements. In addition, interest earned on START deposits is exempt from federal and state taxes when used to pay for higher education expenses.
“START is a great tax break, but it’s much more than that. It’s also a smart investment,” said Treasurer Kennedy. “The program has experienced tremendous growth over the past few years. In 2001, we had a little more than 3,000 account owners. Today, we have more than 39,000 accounts and $307 million in deposits.”
Other START benefits include a state-paid match on deposits ranging from 2 percent to 14 percent, depending on the account’s classification and owner’s adjusted gross income; a choice of investment options in fixed, variable and mixed portfolios; and the flexibility to use funds at any accredited college or university for tuition, room and board, books, fees and more.
For more information on Louisiana’s START Savings program, contact the Louisiana Office of Student Financial Assistance (LOSFA) at 1-800-259-5626, ext. 1012 or visit www.startsaving.la.gov.