Higher education can be hard on your wallet. Fortunately, federal tax breaks may ease the burden. As year end approaches, carefully timing qualified expenses and coordinating education tax credits, scholarships and Section 529 plan withdrawals may help your family maximize these tax-saving opportunities.
Many parents are looking for ways to save for their child’s education, and a 529 Plan is an excellent way to do so. Even better is that thanks to the passage of tax reform legislation in 2017, 529 plans are now available to parents wishing to save for their child’s K-12 education as well as college (two and four-year programs) or vocational school.
The $1.66 trillion Consolidated Appropriations Act, 2023, was signed into law on December 29, 2022, by President Biden. Included in the 4,155-page bill is the SECURE Act 2.0 of 2022, which contains a number of tax provisions relating to retirement.
With the end of the year fast approaching, now is the time to take a closer look at tax planning strategies that could reduce your tax bill for 2021.
