We live in a city that has a very low rated school system, therefore we have been enrolling our 2 children in a private school that costs $12,000 per year per child. This comes with quite a bit of sacrifice, including driving older cars, never buying things we don't need, and living in a relatively inexpensive house. We don't know if it will ever pay off, but we would rather they have the education, and not need it rather then need it and not have it.
With the proposed tax plan, it appears there are some revisions to the 529 plan. A summary outline from Forbes states:
529 Plans. Currently, putting money in a 529 plan won't result in a deduction, but neither the earnings nor distributions in 529 plans are taxable for federal purposes so long as the plan is used for costs associated with college like tuition and room and board as well as fees, books, supplies, and equipment.
Under the House bill, parents may set up 529 plans for unborn children. Additionally, up to $10,000 per year of plan funds could be used for private elementary and secondary school expenses.
Under the Senate bill, 529 savings plans could be used for public, private and religious elementary and secondary schools, as well as home school students.
Although it seems as though you cannot simply deduct the cost of private school from taxes, what limitations are there with placing the $20,000 into the 529, deducting that amount, then immediately taking it out to use for school tuition? Our state is New Mexico.
Edit - Although the quote provided directly states that putting money into a 529 will not result in a deduction, I wanted to leave my question as-is because it might be appropriate for state taxes.