NEW 2018 TAX CUT AND 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.
Additional features included in the Tax Cut and Job Act:
- Section 117(d): Tax-free tuition reductions for the children of teachers and other employees in our schools remain intact.
- Section 127(a): Tax-free benefits of up to $5,250 annually for educational assistance to employees are retained.
- Teacher tax deduction: Educators can still take the $250 deduction for expenses for classroom materials or professional development.
Please share this information about changes in the US tax law with your families and staff.
For personalized information about the advantages of a 529 plan, or information about Section 117(d) and Section 127(a), please advise families and staff to contact their financial advisors.