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Jacobs & Newmark, CPAs
100 Lexington Drive, Suite 250, Buffalo Grove, IL 60089
Phone: 847-537-0100
October 2024
October 2024 Q and A
QUESTION:
My daughter is paying private high school tuition for my two grandchildren. Is it true that I can take tax-free distributions from a 529 plan to help pay these costs?
ANSWER:
Federal tax laws allow tax-free distributions of up to $10,000 per student per year to pay tuition for elementary and secondary private and parochial schools. However, each state manages its own 529 plan limits and potential tax deductions, so check with your state before taking action.Take advantage of the new tax law, but also look into giving up to $18,000 annually tax-free to each grandchild (or $36,000 a year if you and your spouse make gifts).
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