Another benefit from tax reform is the expansion of 529 education savings accounts. In addition to saving for college, West Michigan families will now be able to use a 529 account to save for elementary and high school expenses.
From the Wall Street Journal: “So-called 529 education-savings accounts, and Americans who can benefit from using them, are big winners in the recent tax overhaul. … Many people will also benefit from a change that now allows assets in these plans to be used to pay elementary and high school tuition.
“In addition, 529 account assets can now be transferred to so-called 529 ABLE accounts. These accounts offer tax-favored savings for people with disabilities without affecting eligibility for benefits such as Medicaid. …
“529 accounts, which are named after a section of the tax code enacted two decades ago, allow savers to contribute dollars after federal taxes have been paid on them. The assets are then invested and can grow free of federal and state taxes. Withdrawals are tax-free if they are used to pay eligible education expenses such as college tuition, books, and often room and board.”
The strengthening of 529 savings accounts is one example of how reforming our nation’s out of date tax code is having a positive impact and increasing opportunity for hardworking Americans. Learn more about 529’s and tax reform here.