Benefit for Tuition-Paying Parents in 2017 Tax Reform

By Greg Bokman, Chief Financial Officer, The Langley School

Exciting news from the CFO’s desk! I’m Greg Bokman, and I joined The Langley School’s administrative team about a year ago as the CFO following four years at Washington International School and a number of years in the for-profit world.

Due to the tax reform legislation passed in December 2017, you may now be able to use $10,000 annually per student at tuition-based schools as qualified education expenses from 529 plan funds. This change in legislation can provide tax benefits that were previously only available for higher-education expenses.

What is a 529 plan?
529 plans are tax-advantaged investment accounts designed to help pay for college expenses. Earnings on contributions grow with tax-free compounding and withdrawals are not taxed as long as they are spent on qualified higher-education expenses at any eligible post-secondary institution.

With the new tax law, parents whose children attend independent elementary and high schools will have more options when it comes to saving for tuition.

Additionally, certain states offer a deduction or credit for contributions to 529 plans. The amount of potential benefit and complexity of these tax-advantaged vehicles varies by state, so be sure to consult with your tax advisor for advice on your specific situation.

Here are some excellent resources to perform additional research and ask questions:

And, for the Virginia 529 plan, you can call the Virginia529 Customer Service department at 888-567-0540(select option 3 for customer service).

Paying tuition is a worthy, and long-term, investment, so I hope this helps your financial planning.

 

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