Hello, I just wanted to make sure I'm understanding how a deduction works.
I'm looking at an Illinois 529 plan and its tax deduction. I'm allowed to deduct up to $10,000 per year for a 529 contribution.
Illinois flat tax is 5% if I understand correctly.
So if I contributed $10K to a 529 plan, did I essentially reduce my tax bill by $500? ($10K multiplied by 5% being $500).
Yes if your contribution went to either of the following Illinois only plans:
Bright Start College Savings Program (Advisor sold or Direct sold) College Illinois 529 Prepaid Tuition Program Bright Directions College Savings Program
Maximum deduction can be $20K on a joint tax return.
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