Let’s face it. Children are often more interested in the box that contains a holiday present than the present itself. Christmas and Chanukah gifts are often discarded after a few weeks, remaining unused in the back of a closet or bookshelf. Finding the right gift is often a challenge.
Do you want to give a holiday gift that will yield dividends for decades to come? You do?
Then, give the gift of college.
Contributions to a child’s 529 college savings plan will increase the likelihood that they will enroll in and graduate from college. It will expand college choice and reduce debt at graduation. College graduates with a Bachelor’s degree have at least two-thirds more income than people with just a high school diploma, according to the U.S. Bureau of Labor Statistics (BLS).
How to Give the Gift of College
Most 529 plans have a gifting platform, such as Ugift, GoTuition and GiftedPath, which makes it easy for friends and family to contribute to your child’s 529 plan. They also provide free downloadable gift certificates that you can print at home to announce your gift.
There’s also Gift of College, which sells gift cards at thousands of grocery stores, bookstores and other retailers nationwide. The recipient can transfer funds from the gift card to their 529 college savings plan.
Tax Breaks on Contributions to a 529 Plan
Contributions to a 529 plan are not subject to gift taxes, up to the annual gift tax exclusion of $15,000 (2021) per beneficiary. If the contributor wants to give more, they can use superfunding to give a lump sum contribution up to $75,000 and have it treated as occurring over a five-year period.
There are additional tax benefits to contributors. More than two-thirds of the states provide a state income tax deduction or tax credit on contributions to the state’s 529 plan. In seven states, the state income tax break is for contributions to any state’s 529 plan.
Should You Give a Tangible Gift Too?
Small children may be disappointed if they don’t receive a gift that they can see and touch. So, you may wish to give a small, inexpensive gift along with the gift of college.
You could always give them an empty box. The larger Amazon
Here are suggestions for low-cost gifts. A personal gift is often more meaningful than a store-bought present.
- A handwritten note.
- A framed photograph of you with the recipient.
- Handmade gifts, such as socks or a sweater you knit yourself.
- Homemade baked goods, such as cookies, cakes and pies.
- Index cards with your favorite family recipes. You can cook one of the dishes together.
- A custom coffee mug.
- An origami book and origami paper, or an origami model you folded for them. Dover Publications publishes inexpensive origami books.
- A board game that you can play together. Connect 4, Monopoly, Chutes & Ladders, Bingo, Boggle, Jenga, Checkers and Tic Tac Toe are popular choices. (Exploding Kittens is my favorite.) A puzzle book or a deck of cards is also a good option.
- A leather wallet or belt that you emboss with their initials.
- Your favorite book, with a $10 bill hidden among the pages.
- The parents will appreciate free babysitting, and the children will enjoy spending time with you.