With the school year just beginning, now is a good time to start thinking about how the new federal tax law could impact your family and educational plans.
Child & Family Credit
The new law – passed in December 2017 – increases the child tax credit to $2,000 per qualifying child; $1,400 of this amount is refundable. The law also adds a $500 nonrefundable credit for qualifying dependents other than children. More importantly, the law increases the phase-out for the child tax credit. That number has risen from $110,000 to $400,000 for married taxpayers filing a joint return, and from $75,000 to $200,000 for other taxpayers.
Education benefits such as the student loan interest deduction, education credits, exclusion for savings bond interest, and tuition waivers for graduate students remain intact.
Section 529 Plans
Qualified education expenses of a 529 account are expanded to include up to $10,000 per year for a child’s elementary and secondary education.
More than ever, this year it is important to be having discussions with your tax professional about how the new tax law impacts your finances and your family.
Author: Pedro T. Rincon, CPA, CVA
Company: Osborne Rincon CPAs
Contact: Mr. Rincon is a partner with Osborne Rincon, CPAs in La Quinta. He can be reached at (760)777-9805 or firstname.lastname@example.org.
About: Pedro T. Rincon, CPA, CVA has over 20 years of experience in accounting with an extensive background in providing accounting and tax services for agriculture, construction, distribution, hospitality and not-for-profit entities.
Last modified: August 14, 2018