From the desk of Tony Welty, Director of Finance & Operations:
Starting this year, participants in 529 savings plans can utilize their annual distributions to contribute up to $10,000 toward private school tuition and books. This is a tremendous benefit of the Tax Cuts and Jobs Act and is wonderful news for Brook Hill families.
Traditionally, a 529 plan allowed families to accumulate money on a tax-free basis and utilize the savings only to pay for a child’s college education. With the passage of the recent federal tax overhaul, these funds may now be applied to elementary, middle and upper school costs as well.
The state of Texas currently offers two types of 529 plans – prepaid and savings.
The prepaid tuition plan covers only tuition and required fees, while the savings plan may be used to pay qualified educational costs not covered by the prepaid plan. Qualified educational costs include books, lab fees and room and board.
With two different plans being offered, consumers have the flexibility to choose one type of plan best suited to their needs, or the option to combine both plans into a program specially designed to best suit the needs of their future graduates.
We encourage you to seek the advice of your investment advisor and/or tax professional to inquire as to how you might best take advantage of this new benefit applicable to 529 plans.