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offers a tax credit worth 20% of the first $5
The size of these tax incentives varies significantly. Indiana,doudoune moncler homme, for example,monster beats headphones, offers a tax credit worth 20% of the first $5,000 in 529 plan contributions. A couple with two children and an annual income of $100,000 could save $1,040 in taxes by contributing $5,beats by monster,000 to their home state's plan, according to a Morningstar analysis. If that same couple lived in Arizona and contributed $5,monster beats by dre,000 to Arizona's plan, they'd save about $63, Morningstar found.

Families that live in states with no tax break — either because the state doesn't offer one or the state has no income tax — should look for a plan that has the best-performing investments and the lowest costs, Lutton says. A good place to start is Morningstar's annual list of top-rated 529 plans, shown in the box.
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