Yes, You Really Can Pay for Private School With 529 Plans Now
Even if you’re not wealthy enough to save piles of money in 529 plans
and wait out the tax-free capital gains, little is stopping you from parking your annual private school tuition in an account for a few weeks just to pick up that year’s tax break.
And because those states offer tax incentives to people saving money in the 529 plans,
they’ll be coming under even more fiscal pressure by forgoing tax revenue.
The Republican bill would allow people to take $10,000 out of 529 plans each year
to use for tuition for private school in kindergarten through 12th grade.
Just last month, it was not certain that the Senate would go along with the House of Representatives’ proposal
to let families use 529 college savings plans to pay for private school from elementary school onward.
And once the beneficiary of the 529 account enters college, the family can withdraw as much as the entire annual cost of college
and related expenses (not just $10,000) each year, avoiding even more capital gains taxes over that period.