In addition to the 529 plan’s federal tax benefits, a majority of states also offer their own tax benefits. A cherry on top, if you will. Folks in 29 states and Washington, D.C. who contribute to 529 plans are eligible for state income-tax deductions or credits so long as they contribute by their state’s deadline.
A report from Saving for College shows that all states except the following six have a Dec. 31, 2021, contribution deadline:
- Georgia (April 15, 2022)
- Iowa (April 30, 2022)
- Mississippi (April 15, 2022)
- Oklahoma (April 15, 2022)
- South Carolina (April 15, 2022)
- Wisconsin (April 15, 2022)
6. Use up your FSA money (or say bye bye)
A Flexible Savings Account (FSA) is a health-care savings account offered by some employers. It allows account holders to tuck away up to $2,750 per year, tax-free. The catch is that FSAs have a “use-it-or-lose-it” stipulation. That means that if you don’t use up your money by the deadline, which in most cases is Dec. 31, you can kiss that money goodbye.