Newly passed tax law could benefit many
Deep inside legislation passed in late 2019, is a provision that broadens the acceptable use of 529 college savings plan funds. Background 529 savings plans are available to set aside after-tax funds to pay for college and K through 12 education expenses. As long as the funds are used to pay for qualified expenses, any earnings or interest in the savings plan are tax-free. Any unused earnings on funds are subject to a penalty and income tax. The new rule To help students financially after graduation, leftover money in a 529 plan may now be used to pay off student loans. There is a $10,000 lifetime limit for the 529 plan's beneficiary and each of their siblings. For example, parents who have 4 kids can take a $10,000 distribution from the 529 plan to pay student loans for each of their children, for a total of $40,000. Ideas to use this new rule
Given the recent changes in 529 college savings plans, it makes a lot of sense to explore your options and either consider setting up an account or developing a plan for best uses of the funds in your accounts. "Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office. The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance. We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs. We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at [email protected]. For more free resources, such as Tax Rates, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com. Monarch Accounting Group, Inc 145 Tower Drive, Suite 4 Burr Ridge, IL 60527 Phone (630) 320-3720
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September 2023
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