Arizona SB 1179, a law originally meant to change law pertaining to Ignition Interlock Devices, was modified to include several tax provisions.
One such provision was a retroactive change in law pertaining to contributions to Qualified Tuition Plans, also known as §529 Plans. For single and head-of-household filers, the deductible amount increased from $750 to $2,000. For married couples filing jointly, the amount increased from $1,500 to $4,000.
Aaron’s Take: Most contributions to §529 plans exceed the former limits. However, the increase – while appearing to be significant – is not. Due to our already low state income tax rate, the increase isn’t likely to save taxpayers more than $125 per year. Yes – all savings is good, however, this is not enough of a savings for us to recommend a client to change their investing behavior.
If you need to amend your income tax return, please contact our office.