Pub. 1 2019 Issue 5

25 nebraska society of cpas W W W . N E S C P A . O R G 6150 Village View Drive, Suite 113 • West Des Moines, IA 50266 515.279.1111 • 888.226.0400 • FAX 515.279.8788 info@IPE1031.COM WWW.IPE1031.COM Manage Exchange andProfessionalRisk withtheMidwest’s PremierExchangeResource amount normally allocated for taxes in a standard investment account remains in the account. Over time, as the account owner saves for five, 10, 15 years, and more, these tax savings can add up and make a big difference. Second, when the time comes to use the funds in a 529 plan account, withdrawals used for qualified educational expenses such as tuition, room, board, supplies, and more are tax-free. This means that every dollar saved can go where it’s most needed. Third, Nebraskans have access to significant state income tax benefits when saving with the Nebraska state plan, the NEST 529 College Savings Plan. Contributions fromNEST 529 account owners who pay Nebraska state income tax are eligible for an annual state income tax deduction of up to $10,000 for NEST 529 contributions, or $5,000 per spouse if filing separately. This deduction makes saving for college a smart option for every Nebraskan. Nebraskans who have a 529 account in another state can also take advantage of the Nebraska state income tax deduction by rolling funds over into a NEST 529 account. Families should keep in mind that the tax benefits listed so far are specifically designed to help magnify their college savings. That means that the earnings portion of any withdrawals used for non-qualified expenses may be subject to federal, state, and local taxes, as well as an additional 10 percent federal tax. The fourth important tax advantage of a 529 plan is particularly relevant as we draw closer to the holidays and gifting season. 529 plan contributions qualify for the annual gift-tax exclusion, which for 2019 is $15,000 total per person for each beneficiary, or $30,000 if filing jointly. This gives loved ones the ability to make significant contributions to a beneficiary’s college savings without triggering any gift tax. Those who wish to contribute above the limit can also take advan- tage of five-year gift forwarding—allowing access to gift tax and estate planning benefits as long as the total gifted amount over five years does not exceed $75,000, or $150,000 if filing jointly. It is important to note that in Nebraska the annual state income tax deduction is still capped at $10,000, and those larger contribution amounts will not count toward future years’ tax deductions. As a growing number of Nebraskans begin the college savings journey, having the tools to maximize their efforts can make a big difference. 529 plans are designed to help families get the most out of every penny they put away for higher education. However your clients choose to save, I encourage them to start early and contribute often. t Deborah Goodkin is the managing director for savings plans at First National Bank of Omaha. For more information about saving for college and the NEST 529 Col- lege Savings Plan, email clientservice@nest529direct.com or call (888) 993-3746. 1 Anthony P. Carnevale, Nicole Smith, and Jeff Strohl, “Recovery: Job Growth and Ed- ucation Requirements Through 2020,” Georgetown Public Policy Institute, Center on Education and the Workforce, accessed September 12, 2019, https://cew.georgetown . edu/cew-reports/recovery-job-growth-and-education-requirements-through-2020. 2 “New Study Finds 57% of Americans UnfamiliarWith 529 Plans,” NEST529 College Savings Plan, accessed September 12, 2019, https://www.nest529direct.com/home/ news-list/content-orphan/section--columns/section--columns/new-study-finds-57- of-americans.html. Continuing professional education sponsored by the Great Plains Federal Tax Institute, Inc. Registration Fee Discounts: n Early Registration $470 if received by November 15 n $530 thereafter n $365 for first time attendees Online registration to open by October 1 For more information go to www.greatplainstax.org or contact the Program Manager at 402-483-4234 Thursday & Friday December 5 & 6, 2019 for a second year at Embassy Suites and Conference Center LaVista, Nebraska Don’t Miss It! • Three hours from nationally renowned speaker Paul S. Lee on Managing Tax Basis Today (for Tomorrow) and the Quest for Quantum Exclusions • An in-depth review of federal tax law changes • A full discussion on unwinding FLPs and LLCs • A detailed presentation on ways Employee Stock Ownership Plans (ESOPs) can be used in connection with liquidity ownership succession and estate planning • A look at Nebraska and Iowa state tax and economic development updates • A review of current developments in income, estate and gift taxes, presented by local tax experts • By continued demand, presentation on current tax issues and planning opportunities for farmers • A valuable Ethics and Technology presentation from University of Nebraska College of Law faculty members