There has been a lot of buzz lately about the changing tax laws and the impact on alimony. (Essentially, after 2019, the paying party no longer has a tax deduction and will be taxed on the alimony he/she pays, while the receiving party is not taxed on this income.)
Another change in the new tax law -- getting less attention, but also important -- involves private school. Parents can now use funds in their 529 accounts to pay for private school tuition and books from elementary school through high school. This money used to be set aside for college or post-high school education only.
For our divorce mediation clients at Westfield Mediation, LLC, we create a plan for all the parenting expenses, including education expenses. For some families, that includes private school. So, now this change in the tax code has to be factored in. Being able to pay for private school with tax free dollars may help some families. In addition, families with existing 529 accounts may benefit from being able to access this money earlier.
But there are potential problems as well. For example, divorcing parents who want to use their 529 accounts for private school will have to consider whether there is going to be enough money in these accounts for both private school and college for their children or whether they need to rethink their long-term savings plans. In divorce mediation, we work together with our clients to create agreements that are comprehensive enough to address their children’s needs through college, yet flexible enough to account for the changing financial situation of the family.
For more information about parenting plans or divorce mediation, please contact Randi M. Albert, JD, or Michelle Weinberg, M. Ed., Licensed Marriage and Family Therapist, at Westfield Mediation, LLC at 908.913.0373. View our website at www.westfieldnjmediation.com or email us at info@westfieldnjmediation.com.
Another change in the new tax law -- getting less attention, but also important -- involves private school. Parents can now use funds in their 529 accounts to pay for private school tuition and books from elementary school through high school. This money used to be set aside for college or post-high school education only.
For our divorce mediation clients at Westfield Mediation, LLC, we create a plan for all the parenting expenses, including education expenses. For some families, that includes private school. So, now this change in the tax code has to be factored in. Being able to pay for private school with tax free dollars may help some families. In addition, families with existing 529 accounts may benefit from being able to access this money earlier.
But there are potential problems as well. For example, divorcing parents who want to use their 529 accounts for private school will have to consider whether there is going to be enough money in these accounts for both private school and college for their children or whether they need to rethink their long-term savings plans. In divorce mediation, we work together with our clients to create agreements that are comprehensive enough to address their children’s needs through college, yet flexible enough to account for the changing financial situation of the family.
For more information about parenting plans or divorce mediation, please contact Randi M. Albert, JD, or Michelle Weinberg, M. Ed., Licensed Marriage and Family Therapist, at Westfield Mediation, LLC at 908.913.0373. View our website at www.westfieldnjmediation.com or email us at info@westfieldnjmediation.com.
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