Boost Your College Savings with a Tax Refund

Boost Your College Savings with a Tax Refund feature image
This post is sponsored by the experts at Edvest.

Tax season is in full swing, and while filing your taxes isn’t necessarily fun – a refund can be a
great incentive to get them done. While it may be tempting to spend it, saving all or even some
of a refund in a 529 college savings account can make a significant difference in a child’s
financial future.

It’s probably not news to you that higher education can be expensive. Like me, I am sure
many of you reading this are paying back student loans of your own. Unfortunately, tuition
costs are predicted to continue growing, and according to U.S. News data, the average
annual cost of a public college education is $10,423 (for in-state students) and $22,953 (for
out-of-state students). ¹ Multiply that by an average of four years, and you could look at
anywhere from $40,000 to $90,000 for just tuition.

But don’t be scared by these big numbers. Rather, focus on the fact that every dollar you
save today may be one dollar your child does not have to pay back in student loans
down the road.

Saving for Higher Education with a 529 Plan

My role as the Director of the Wisconsin College Savings Program is to help families
develop a higher education savings strategy that works for them using Edvest 529, the state’s direct-sold 529 College Savings Plan.

A 529 plan is a tax-advantaged investment account designed to help families save for
future higher education expenses for a designated beneficiary – usually a child,
grandchild, or other loved one. Savings in a 529 plan grow free from federal income tax,
and withdrawals remain tax-free when used to pay for qualified education expenses like
tuition and fees, books, laptops, and more at any accredited public or private university,
college, technical college, community college, or professional school nationwide and

Additionally, Wisconsin taxpayers who open a new Edvest 529 account or contribute to an
existing account by Tuesday, April 18, 2023 – regardless of their relationship to a child –
can deduct up to $3,560 annually per beneficiary from their 2022 Wisconsin state income
taxes for married individuals filing jointly. Individuals filing separately or divorced parents
can deduct up to $1,780. Limitations apply. ²

Use a Tax Refund to Boost or Start Your College Savings

I like to let families know that when it comes to saving for a loved one’s higher education,
the most important thing you can do is start. And while that may seem easier said than
done, leveraging ‘extra money’ that comes from a tax refund can provide the spark to get
you started.

Consider the fact that the average tax refund amount for U.S. families in 2022 was
$3,039.³  Assuming one only saves the average tax refund amount every year for 18 years –
with no investment return – annual savings would accumulate to almost $55,000!

If you are already a college saver, think about contributing some or all of your tax refund
to your existing 529 account to give it a boost. If you haven’t started saving for college yet,
use that refund to open a 529 account for your child, grandchild, or other loved one and
start your savings journey.

Get Started

At the end of the day, there is no right or wrong way to fund a 529 account. A lump-sum
contribution that comes with something like a tax refund can certainly be appealing, but
keep in mind that you can open an Edvest 529 account any time with as little as $25 and
make regular ongoing contributions from your bank account or via payroll direct deposit.
The first step is simply starting as early as possible in a child’s life.

Visit to learn more and start saving today!


-Jessica Wetzel, College Savings Program Director -Wisconsin Department of Financial

¹ Source: U.S. News.

² To learn more about Wisconsin’s Edvest 529 College Savings Plan, its investment objectives,
tax benefits, risks, and costs, please see the Plan Description at Read it carefully.
In 2022, Wisconsin taxpayers can qualify for a state tax deduction up to $3,560 for each
contributor per beneficiary per year from contributions made into an Edvest College Savings
Plan. In 2023, Wisconsin taxpayers can qualify for a state tax deduction up to $3,860 for each
contributor per beneficiary per year from contributions made into an Edvest College Savings
Plan. Investments in the Plan are neither insured nor guaranteed and there is the risk of
investment loss. Consult your legal or tax professional for tax advice. If the funds aren’t used for qualified education higher expenses, a federal 10% penalty tax on earnings (as well as
federal and state income taxes) may apply. Check with your home state to learn if it offers
tax or other benefits such as financial aid, scholarship funds, or protection from creditors for
investing in its own 529 plan. TIAA-CREF Individual & Institutional Services, LLC, Member
FINRA, distributor and underwriter for Wisconsin’s Edvest 529 College Savings Plan.

³ Source:,Key%20findings,average%20tax%20return%20was%20%242%2C827


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