The summer is now squarely in the rearview mirror and schools everywhere are back in session. For parents, it can be a relief getting the kids back to class – and getting all of those back-to-school preparations knocked off the to-do list. We’re eager to see our children learn, to grow, and to succeed.
That’s why we buy the school supplies, sign up for the PTA meetings, and help them with their homework. It’s also why a parent is never done preparing for their children’s future.
September is College Savings Month, and state officials are holding events highlighting 529 plans – a great resource that can help parents plan for their kids’ future learning while gaining a tax break. Keep reading to learn how 529s aren’t only for higher education anymore, and why we’re asking you to learn more about how they can help parents fund kids’ K-12 schooling, too!
Executive Director, Great Lakes Education Project
“Gabriela Chulevski, K-2 principal at Detroit Academy of Arts and Sciences, says it’s especially helpful to collaborate with other charters that face similar issues, such as chronic absenteeism.
“How are you overcoming students who might have been absent for a week?” she said, describing the questions she’d like to ask other school leaders in the city. “What plan do you have to make sure that they’re successful when they come back? Just having a thought partner to think things through, so that you’re not alone, is so important.”
“Clearly, our Education Freedom Scholarships proposal is the solution American families want,” said Ms. DeVos in a statement. “This common-sense approach puts students and parents in control, without taking a single cent from public schools or teachers.”
“MESP is Michigan’s direct-sold Section 529 college savings plan, which offers Michigan taxpayers a Michigan income tax deduction on contributions and potential tax-free growth on any earnings if account proceeds are used to pay for qualified higher education expenses.”
529 Plans Help Families Pay for College – And Pay for K-12, Too
Here in Michigan, residents can contribute to something called a “529 plan” (named after Section 529 of the IRS code) to help invest and prepay for their kids’ (or relatives’) college education. The plan is what the experts call “a tax-advantaged savings and investment system designed to encourage saving for the future expenses of a designated beneficiary” – your child, grandchild, or loved one. In other words, when you make a contribution, you get a tax deduction, and account earnings are often tax-free.
Prepaid Tuition plans allow parents to pre-purchase tuition at a college or university at today’s rates, saving big bucks as tuition increases between the purchase date and a student’s eventual enrollment.
Savings Plans allow beneficiaries to see their investment grow as the result of market performance and the state’s best-intentioned investments in things like mutual funds.
Federal law now allows the plans to be used for K-12 educational expenses, as well.
That’s great news!
If your family, or anyone you know, would like more information on the federal tax changes to 529 plans and how to take advantage of the new K-12 opportunities, just click here
If you are currently using a 529 plan for K-12 education expenses we would love to hear your story! Please email your name and a few details to [email protected]