After much political drama and grandstanding, the GOP’s Tax Cuts and Jobs Act is now officially the law of the land, taking full effect in 2018. We won’t bore you here with talk about changes to tax rates or attempts to identify the winners and losers. Nevertheless, there are three changes that we consider noteworthy and have received little attention from the mainstream news outlets.
With tuition inflation running about double that of most other costs, parents (and perhaps grandparents) face a daunting task in saving for college expenses. College Savings Plans (or 529 Plans) are an invaluable tool that allow for a large amount of college saving on a tax-deferred basis. Distributions from a 529 account are federal and state income tax-free if they are used to pay for qualified education expenses such as tuition, books, supplies, and room and board.