As you likely know, our nation recently passed the Tax Cuts and Jobs Act. One portion of the reform bill gives additional benefits to families with 529 plans. What was once savings earmarked solely for college tuition can now be used for private school tuition – as early as kindergarten.
Curious about how you can utilize this new benefit? Want to explore 529 plans for the first time? We are here to help.
A 529 plan is a special savings plan originally developed to help families save money for college while earning tax-free interest. Money put into the plan is subject to regular income taxes before it is deposited into the account. If the money is used for tuition upon withdrawal, no additional taxes will be taken out. (There are taxes and additional fees imposed should the money be used for other purposes.)
Plans are managed by individual states, and each state selects an administrator to broker investments in the plans. Some people choose to open plans directly, while others seek the assistance of financial advisors. Most families open plans through their own state of residence, but that’s not a requirement. You can open a 529 plan in other states.
Previously, the purpose of 529 accounts was to provide families with a strong, long-term savings option for higher education. As of January 1, 2018, those benefits have extended significantly.
Now, families are able to use up to $10,000 annually from their 529 accounts to cover the cost of tuition for K-12 private schools.
If you already have a 529 account and you’ve had a chance to let the interest accrue, it may be beneficial to use some of those savings now. If you have not yet started a plan but think you might like to, now is a good time to take another look. There are a variety of options for families, depending on the age of your child and other factors.
Following these steps will simplify the process:
For more detailed information, and to get started, Click here :
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