It’s Wednesday, which means it’s time to ask those taxing financial questions.
On the subject of taxes: apparently the new tax laws allow parents to use 529 plan money to pay for private school tuition. As the Washington Post explains:
Under the new law, starting with the 2018 tax year, you can withdraw $10,000 per student per year from a 529 plan to pay for primary or secondary education. Unlike funding for college, however, this money can be spent only on school tuition, not textbooks, computers, or other fees or activities. That means it applies only to the 10 percent of children who attend private school. If your kids go to public school, but you shell out for educational summer camps or other enrichment activities, the new law doesn’t apply.
That’s kind of a bummer, because public school also comes with its own hidden costs. (You might remember Ester Bloom’s multiple posts on the actual cost of sending a child to public school; some programs require kids to bring their own Band-Aids, others require them to bring their own Chromebooks, and everything from field trips to aftercare costs extra.
The other bummer? This new law is subject to state-by-state approval, so certain states might not let you pay private school tuition with 529 plan money.
Which brings us to my question: are any Billfolders planning to use 529 money for private school tuition? If you have a very young child/children or are thinking about having kids in the future, will this new law change the way you save for their education?
Discuss — or ask your own questions — in the comments.
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