Kansas 529 Savings Plan

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Iowa David
Posts: 61
Joined: Mon Dec 18, 2017 9:53 pm

Kansas 529 Savings Plan

Post by Iowa David » Wed Dec 05, 2018 6:27 pm

Kansas allows state residents to deduct annual contributions they make to any 529 plan, both Kansas and non-Kansas plans, from their state income taxes. There is an annual deduction limit of $3,000 per beneficiary for an individual taxpayer and $6,000 per beneficiary for married taxpayers filing jointly."
Earlier this calendar year my wife and I made contributions to our children's 529 plan. I was thinking about opening a 529 account for both my wife and I with the following logic:

1. As the owner for each account, we have the flexibility to change beneficiary to any of our children (or grandchildren) in the future without any tax consequence.
2. A contribution to our individual 529 accounts will lower our state income tax.
3. [Edit] If my wife or I ever have the itch to go back to school we have a side fund in place.

Am I missing anything or is the logic flawed?
"Just a 1 percent difference in expenses makes an 18 percent difference in returns when compounded over 20 years." The Boglehead's Guide to Investing

hawkfan55
Posts: 312
Joined: Thu Apr 03, 2014 9:04 pm

Re: Kansas 529 Savings Plan

Post by hawkfan55 » Wed Dec 05, 2018 7:05 pm

From the Kansas Revenue Departments website...

"You may reduce the amount of income you pay Kansas Income Tax on by the amount you contribute to the Learning Quest Education Savings Programs up to a maximum of $6,000 per student if you are married filing a joint return, and $3,000 per student for any other filing status. You enter the amount to be subtracted on Kansas Form Schedule S, Part A. Any taxpayer who contributes to the account is entitled to the deduction regardless of whether or not they are the account owner. For more information about Learning Quest, call 1-800-579-2203, or you may visit their web site at www.learningquest.com.

Contributions to another state's qualified 529 tuition program are also eligible for the above described subtractions. For example, a taxpayer with Kansas source income may contribute to any other state's qualified 529 program and still take a deduction on their Kansas income tax return up to the maximum of $6,000 per student for married taxpayers filing a joint and $3,000 per student for any other filing status."

I would recommend you call Learning Quest at 800-579-2203 or Kansas' Revenue Department for further clarification.
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sco
Posts: 826
Joined: Thu Sep 24, 2015 2:28 pm

Re: Kansas 529 Savings Plan

Post by sco » Thu Dec 06, 2018 2:20 pm

You don't have to use KS 529, you can use Vanguard's or Fidelity's if you prefer.

Iowa David
Posts: 61
Joined: Mon Dec 18, 2017 9:53 pm

Re: Kansas 529 Savings Plan

Post by Iowa David » Sun Dec 09, 2018 7:10 pm

My title wasn't very clear - I'm a Kansas resident interested in opening a 529 plan with Vanguard. Not using Kansas' 529 plans.

Going back to the original question - thoughts on my wife and I opening our own 529 plan for future considerations?
"Just a 1 percent difference in expenses makes an 18 percent difference in returns when compounded over 20 years." The Boglehead's Guide to Investing

sco
Posts: 826
Joined: Thu Sep 24, 2015 2:28 pm

Re: Kansas 529 Savings Plan

Post by sco » Sun Dec 09, 2018 9:35 pm

In that case, you are correct on all points.

b4nash
Posts: 125
Joined: Wed Apr 11, 2012 11:20 am

Re: Kansas 529 Savings Plan

Post by b4nash » Sun Dec 09, 2018 9:46 pm

Isn't the deduction the same regardless of how many 529 accounts or the beneficiary? Why not just keep the one account with you/your spouse as the owner and change the beneficiary to whatever family member needs it.

sco
Posts: 826
Joined: Thu Sep 24, 2015 2:28 pm

Re: Kansas 529 Savings Plan

Post by sco » Sun Dec 09, 2018 10:26 pm

b4nash wrote:
Sun Dec 09, 2018 9:46 pm
Isn't the deduction the same regardless of how many 529 accounts or the beneficiary? Why not just keep the one account with you/your spouse as the owner and change the beneficiary to whatever family member needs it.
It is the same, as long as you are married filling jointly.

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