I have been looking into 529 plans for my son, and my primary banking and financial institution offers a 529, but their 529 is not as high performing as some other likes Vanguard, T Rowe, or State Farm.
However, my state offers a 529 that performs above average, and offers state income tax deductions for money contributed to the 529 plan (up to $4,000 per year).
Right now I can't afford to contribute $4k each year, but I will be putting some money in a 529, regardless. I'd rather be using my income tax money to finance my son's education.
For example, if I contributed $1500 in 2013 to the state 529, would I be able to write off $1500 from my state taxes? If I got a refund from the state for $1500, I could then deposit ta into the 529. Or I could try to adjust my state withholding so it balances out.
With the relatively short window for 529s (usually ~18 years), does it make sense to go for the highest performing 529 available (which could change obviously), or should tax incentives also be considered? (Note: I have checked and you can use the 529 account to fund education in other states, it is not limited to just my state).