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Changes to tax plan helps parents save on private school tuition

The new tax law signed by Trump brings with it several changes including some that could impact parents. One of these changes is to 529 plans.

For years, families have had the opportunity to save money for their child's college tuition by setting aside money into whats called a 529 account. That way, the money can earn interest while the student finishes high school and parents don't have to pay taxes to the federal government on that interest.

In the state of California, you pay taxes as the money goes into the account, but it grows tax-free and no taxes are owed as you take it out.

According to Lisa Markwith with Liberty Tax, you can now use up to $10,000 from your 529 account to pay for private elementary and high schools.

This could make it easier for parents to send their kids to private schools but some argue it takes tax revenue away from the states.

The principal of Liberty Christian in Redding, Dan Perrine, says while this could help pay tuition, it's hard to say how much money any one family will actually save.

"I honestly don't know how much impact it's going to have on parents making that decision," Perrine said. "It certainly is helpful to them but will the private or charter schools really benefit from this by seeing increased enrollment, I honestly don't know. It's so new that, obviously, we don't know."

If you have questions when filing your taxes you can ask an IRS approved tax professional by clicking here.

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