In a bold move aimed at empowering American families to invest in their future, a new proposal—often referred to as “Trump Accounts”—seeks to expand the use of 529 savings plans, making them even more attractive for long-term, tax-advantaged growth.
At Wilson Accounting Group, we stay on top of policy changes so you don’t have to—and here’s what you should know about how this proposal could impact your tax strategy.
What Are 529 Plans—And How Do They Work Today?
529 plans are tax-advantaged savings accounts designed to help families set aside money for future education costs. Contributions grow tax-free, and withdrawals are also tax-free when used for qualified education expenses such as tuition, books, and room & board.
Recent expansions have allowed 529 funds to be used for:
- K–12 tuition (up to $10,000 per year)
- Apprenticeship programs
- Student loan repayments (up to $10,000 per borrower)
What’s New with “Trump Accounts”?
While not yet finalized, this proposal would broaden the use of 529 accounts beyond education. Similar to a Roth IRA, funds could potentially be used for a wider range of life milestones or investments—while still growing tax-free.
Potential uses under the proposed expansion could include:
- First-time home purchases
- Starting a business
- Retirement savings
- Health-related expenses
- Family caregiving or long-term care
If enacted, this would make 529 accounts one of the most flexible tax-advantaged tools available to individuals and families—particularly appealing for young professionals, entrepreneurs, and multi-generational households.
Why It Matters for Tax Planning
These expanded 529 uses could create major planning opportunities:
- Early contributions could lead to decades of tax-free growth
- High-income earners could gain another vehicle for long-term wealth planning
- Parents and grandparents could fund future generations with more flexibility
Like with any tax-advantaged strategy, timing and contribution limits matter. Early adopters may benefit most if the proposal becomes law.
Stay Informed—and Prepared
Whether you’re saving for college, retirement, or building a financial legacy, changes to 529 plans could open up new doors for tax-free investing. At Wilson Accounting Group, we’re here to help you understand your options and build a tax-smart strategy that evolves with your goals.
