Tax time is just around the corner, and for many families, this may mean a refund is coming. This is the perfect moment to turn that “found money” into an investment for near or longer-term future education needs. In addition to college expenses, 529 plans may also be used for K-12 tuition and some expenses, trade schools or even accreditations and continuing education classes, and more. Here’s a quick, forward-looking checklist to help you prep now and feel confident when your refund lands.

Decide your refund split before it hits

If a refund is likely, decide ahead of time how you’ll use or invest it.  Investing some or all of your refund in a 529 education savings account with The Education Plan® can make a meaningful dent in future costs. You can log in now and set up a one-time contribution so you’re ready the day your refund arrives. If you don’t have a 529 account yet, consider setting one up now, before your refund arrives. It takes about 15 minutes to open one, and you can contribute an amount that fits your needs. 

Tip: Pair a one-time lump sum (maybe your tax refund) with a monthly automatic contribution (even “small” amounts add up). The lump sum builds momentum; the automatic contribution keeps your progress going all year.

Deduct 2025 contributions 

If you’re a New Mexico resident, you can deduct 100% of the contributions you made to The Education Plan in 2025 from your New Mexico state taxable income. Log in to your account to see your total contribution amount in 2025. 

Gather last year’s paperwork

If you made a qualified or non-qualified withdrawal from your 529 last year, keep an eye out for Form 1099-Q. This form documents all distributions from your account. It can help you determine if any of the withdrawals you made are subject to income tax. If you took a non-qualified withdrawal from your account, Form 1099-Q will include guidance on how to file. In addition to Form 1099-Q, you should gather records and receipts you kept over the last year to support qualified withdrawals.  

Make gifting easy (hello, grandparents!)

Tax season is a time when many families talk about money. If grandparents or other loved ones ask if they can help, share your unique Ugift code with them and direct them to the Ugift gifting landing page. 

In addition to the annual gift tax exclusion, 529 plans also allow a special “five-year” gift election that lets someone make a larger contribution and treat it as if it were made evenly over five years for gift-tax purposes. It’s a powerful way to celebrate milestones like birthdays or graduations or anything you deem gift worthy!

Tighten up your saving system for the year ahead

• Name your goal: “$3,000 this year” is more motivating than “save more”.

• Automate the first 10%: Start small ($25 or $50 per paycheck) and revisit periodically (think pay raise or bonus).

• Increase on autopilot: Schedule a mid-year bump (for example, July 1) so your progress accelerates with less effort.

• Keep receipts together: Create a single digital folder for support of qualified 529 withdrawal of funds, such as tuition, books, and housing documentation. Future-you will thank you next spring.

Small, steady steps, plus a well-intentioned use of a tax refund, can add up to big opportunities. If you’re ready to put your refund to work for future education, The Education Plan is here to help every step of the way.

This information is for general educational purposes and should not be considered financial advice or tax advice. We recommend consulting with a tax professional or financial advisor for personalized guidance.