529 Plans and Possible Tax Benefits

In December the US Congress passed the Tax Cut and Jobs Act. This means that in 2018, changes to the tax laws will NOW allow tax-advantaged college savings plans (529 Plans), to ALSO cover up to $10,000 a year in K-12 public, private, and religious school expenses. These savings plans allow families to invest their after-tax money and, through compound interest accrue earning rapidly over time. Families pay no taxes on those interest earnings. I encourage you to talk with your personal tax advisor for more information.

Historically, 529 Plans have allows for long-term tax deferred growth of investment earnings that were used for qualified education expenses which has now been expanded to include private elementary and high school, up to $10,000 per year.

New 2018 Tax Cut & Jobs Act Information On December 22, the US Congress passed the Tax Cut and Jobs Act. Beginning in 2018, changes to the law will now allow tax-advantaged college savings plans, known as 529s, to also cover up to $10,000 a year in K–12 public, private, and religious school expenses. These savings plans allow families to invest their after-tax money and, through compound interest, accrue earnings rapidly over time. Families pay no taxes on those interest earnings. Check with your tax advisor for more information.

Some guidance I have seen has suggested an account for K-12 and an account for college.  This is due to the investment choices available in the account and the ability to segregate long-term versus short-term investments.

In Omnibus Christus – Christ in All,

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