Many people are still confused by the new tax cuts, and what it means to them. If you have college aged students or 529 Savings Accounts, here’s a quick look into the changes.
Tuition waivers remain in place
Graduate students still won’t have to pay income taxes on the tuition waiver they get from their schools. Such waivers are typically awarded to teaching and research assistants.
Employer tuition assistance remains non-taxable
Your employer can contribute up to $5,250 a year to your tuition for qualifying continuing education programs, and you don’t pay tax on that.
Student loan interest deduction stays
You’re allowed to claim a deduction of up to $2,500 per year on the interest paid for student loans. This benefit phases out as your income goes up, so that by the time you’re a single earner making more than $80,000 or a couple earning $165,000, you don’t get the deduction. It can save taxpayers as much as $625 a year. But often it’s less.
529 savings accounts can be used in new ways.
In the past, funds invested in 529 savings accounts wasn’t taxed — but it could only be used for college expenses. Now, up to $10,000 can be distributed annually to cover the cost of sending a child to a “public, private or religious elementary or secondary school.” This change is a win for Education Secretary Betsy DeVos.
Perfect Balance Accounting Services LLC can help you navigate through all of the new tax laws. Call 262-554-8104 to set an appointment to go over any questions or concerns that you may have.