As you may know, just before Christmas break Congress passed revisions to the federal tax code. These revisions will allow Catholic K-12 school parents to set up tax-deductible savings accounts to pay for their children's school tuition. Money a parent deposits in one of these savings accounts is tax-deductible. For example, if a parent deposits $5,000 in an account, their taxable income is reduced by $5,000. Reducing taxable income reduces the parent's tax liability. In the $5,000 example, a taxpayer could potentially pay $300 less in taxes, though other factors come into play in preparing one's taxes.
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