3 ways the new tax reform will affect your financial planDecember 29th, 2017 by Anchor Bay Capital's Investment Team
As you explore the new tax reform law with your tax advisor, here are 3 things you may need to keep in mind as you approach your finances this year:
More Flexibility for 529 plans
The new bill allows for 529 college savings plans to be used for expenses related to K-12 education. Previously the plans could only be used for higher education. This applies to costs of public, private or religious institutions, however the limit is $10,000 per year per child. Home school families can also use $10,000 per year toward education expenses. This change also allows money from 529 plans to be rolled over to ABLE accounts to support individuals with disabilities.
Miscellaneous Deductions subject to 2% floor
These deductions will be eliminated for 2018 – 2025. This includes items like unreimbursed employee expenses, dues and subscriptions, and fees paid for professional advice.
Home Equity Interest Deduction
Very little was said about this change, but under the new law there is no deduction for home equity loan/HELOC interest.
Check out this article from Forbes for more info on tax reform and deductions:
What Your Itemized Deductions on Schedule A Will Look Like After Tax Reform