Cut Your Tax Bill While Saving More: Two Smart Future Scholar Moves That May Help You
Perhaps you’re dreaming about what you’ll do with your 2021 refund. Or maybe you’re still working on getting your tax return ready and looking for deductions. Either way, with Future Scholar, you get the opportunity to save more.
Take a 2021 Tax Deduction: It’s not too late
You can contribute to college savings and get a break on your taxes. Any contribution made to Future Scholar by the April 18 tax deadline can be deducted on your 2021 South Carolina income tax return. And you can do it in just two simple steps:
- Make a contribution to a Future Scholar account.
- Select 2021 as the tax year for that contribution.
This amazing tax benefit is available to any South Carolina taxpayer who contributes to a Future Scholar account - not just the beneficiary’s parents.
Expecting a Refund? Boost your savings
Another move that can help you save is to deposit part - or all - of your tax refund in a Future Scholar college savings plan.
This year, many families will have more money coming back to them through the child tax credit. In 2021, the credit was expanded from $2000 per dependent to a maximum of $3600 per dependent as part of the Coronavirus Relief Plan.
- For the first time ever, many taxpayers received half of this expanded credit in advance monthly payments from July through December. Families that chose to take that half of their child tax credit through monthly payments in 2021 can claim the remainder on their federal tax return.
- Families who chose to defer monthly payments can claim all of the child tax credit on their federal taxes, and payment will come to them as a refund on their returns.
Saving all or part of the extra money you received from the 2021 child tax credit can give your college savings a significant boost.
Learn about all the tax advantages
As South Carolina’s 529 college savings plan, Future Scholar is designed to bring families tax advantages they won’t get with other types of savings accounts.
Whether you’ve been fortunate enough to receive a large amount of money and want to reduce your taxes or you’re looking for a way to maximize every dollar you save, Future Scholar provides options. Tax season is a good time to consider all the ways a 529 college savings plan can benefit you.