Parents of children who became disabled before age 26 will
soon be able to open and fund new, tax-sheltered savings accounts for them.
I’ve spoken to several experts about these accounts and want to pass on their
advice.
ABLE accounts, which are similar to 529 accounts for
college, are the result of a little-known law passed in late 2014 known as The
ABLE Act (ABLE stands for Achieving a Better Life Experience). In fact, they’re
also known as 529A accounts.
How ABLE Accounts Will Work
Parents will be able to use money in an ABLE account —
maximum total annual contribution per account: $14,000 — for disability-related
expenses for education, medical and dental care, job training and
transportation, among other things. Although contributions won’t be
tax-deductible, the accounts will grow tax-free, withdrawals for qualified
expenses will be tax-free and people contributing no more than $14,000 a year
won’t owe gift taxes on their generosity. (The disabled children, other
relatives and friends can fund ABLE accounts, too.)
To read more on this story, click here: All About the New ABLE Accounts for the Disabled
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