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Replies: 13
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Oculus Spirit [85337]
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529 SC Tax deduction
Mar 29, 2021, 9:48 AM
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Did I mess this up?
I understood that a 529 contribution was not tax deductible. And it is not a federal tax deduction. However, it appears it is a tax deduction for SC taxes.
I initially tried to input 529 information in turbo tax without any seen credits so I thot it was not beneficial.
So for 7 years now, have I mist out on all of these tax deductions for SC state income taxes?
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All-In [46825]
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No clue, let's get our resident tax genius in here
Mar 29, 2021, 9:50 AM
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Ineligible user®
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Heisman Winner [105590]
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I'm 99.9999999% sure Ineligible doesn't care one bit about
Mar 29, 2021, 9:51 AM
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529 contribution deductions.
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Oculus Spirit [81061]
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If I thought I could shield some income from the feds with
Mar 29, 2021, 11:10 AM
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it by somehow doing doing a 529 for a kid that will never exist, I'd do it.
Maybe FBCoachSC® can tell us about all his tax saving he made by selling a trailer.
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Heisman Winner [105590]
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Yes, only SC Tax deductible, but not Federal. I thought
Mar 29, 2021, 9:50 AM
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it was both and couldn't figure it out last year. You missing out though.
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Oculus Spirit [85337]
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Is it effectively 7% of your yearly contribution
Mar 29, 2021, 9:52 AM
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that you pocket back?
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Heisman Winner [105590]
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I don't recall, TBH, and I have not done 2020 taxes yet.
Mar 29, 2021, 9:55 AM
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Maybe I should get on that sometime soon.
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Oculus Spirit [85337]
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I think it is?? And I just learnt I can amend taxes for
Mar 29, 2021, 9:59 AM
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2019 and 2018.
I assume I could do that easily and it would be worth the front pocket money if less than an hour or two.
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Oculus Spirit [79253]
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It all depends. Qualifying Kweshion hear
Mar 29, 2021, 9:51 AM
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are they YOUR kids? Can you prove that?
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Oculus Spirit [78892]
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yes
Mar 29, 2021, 10:15 AM
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you messed up
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Orange Blooded [2986]
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Lot o points [163012]
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Well, sorry I stepped outta da lunge for a while, but, yes
Mar 29, 2021, 12:06 PM
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SC deduction if you contribute to the SC plan. Many states have the same rules, btw.
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Orange Blooded [4701]
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State Income tax, LOL.***
Mar 29, 2021, 3:32 PM
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Orange Blooded [4095]
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Re: 529 SC Tax deduction
Mar 29, 2021, 3:37 PM
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529 does reduce your SC income for state taxes.
You can amend your taxes back a few years, don't remember how many, and do them oldest to newest because the change for 2017 may effect 2018 etc. This will also most likely require you to amend federal as well.
The SC 529 sucks. The choices aren't great and the fees are high.
If you are doing self directed it's ok. If you purchased through a broker, they are scamming 2.5% forever off of you as a yearly fee.
You can transfer money OUT of the SC 529 to another 529 (through vanguard/fidelity) once a year, so the smart play is to purchase SC 529 to get the state tax benefit and then move the funds to another 529 to avoid the fees.
Message was edited by: castaway®
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