Save Money on Taxes with Revised State Plan

Save Money by Paying Your Child’s Tuition thru Iowa’s 529 Plan
Posted on 07/31/2018

Attention BHCS parents: You may be able to save several hundred dollars a year on your Iowa income taxes by using an Iowa 529 Plan to pay K-12 tuition.

Thanks to new federal and state laws, you can now save money on your Iowa state income taxes by putting money into an Iowa 529 Plan that then sends a school tuition check to you or to BHCS Admin offices.

The plan has been around for years for college savings. Now it’s available for K-12 private school tuition. You can set up a 529 account guided by an investment advisor or set it up online yourself and make payments to your account up to $3,319 per child.

Grandparents and aunts and uncles can use the plan, too! Grandparents, who have contributed to school tuition for a BHCS grandchild without tax deductions, can now set up an Iowa 529 plan account, direct the account to pay a K-12 grandchild’s tuition, and reduce their Iowa taxes.

Here is a parent plan example : If you are married with two children and both you and your spouse contribute to separate accounts for each child, together you can deduct from your adjusted gross income $13,276 (4 x $3,319 ) in 2018. That could result in significant tax savings on your Iowa income tax returns.

South Dakota and Nebraska residents may benefit too, if they are required to file an Iowa income tax return, but should consult with a financial advisor for specific situations.

The 529 benefit is available right now. State guidelines were formally published this July. For more information, parents can call IAdvisor 529 Plan: 800.774.5127, visit iowaadvisor529.com or contact a qualified tax or investment advisor.