What does the federal tax bill mean for schools and families? These stories can help you understand

If the federal tax bill that the U.S. Senate signed off on in the middle of the night this weekend becomes law, the biggest implications are likely to be for the country’s highest earners and corporations, who will see their tax burden decrease.

But the fine print — which some senators said they had not yet read — spells out potential changes for educators, families, and their schools.

These changes include a provision to allow families to use 529 savings accounts to pay for K-12 private schooling and an increase in how much teachers can deduct for school supplies they buy. Changes to how state and local taxes could be deducted could also prompt changes to education spending.

Fortunately for anyone trying to make sense of the potential changes, journalists covering all topics have been scrutinizing the tax bill (which still has to be reconciled with the version passed by the House two weeks ago). Several have given a closer look at the education implications.

To understand how changes to state and local tax deductions could affect schools, read Moriah Balingit and Nick Anderson in the Washington Post:

Like the House bill, the Senate measure curtails the federal deduction for state and local taxes. Advocates worry that states, counties and cities will have a tougher time raising money for schools — which get nearly all of of their money from state and local tax revenues — because those taxes will no longer be fully deductible. Separately, the bill would bar school districts from using cost-effective, tax-free “advance refund bonds” to refinance school bond debt, a prohibition that could prove costly for districts looking to refinance to save money, according to John Musso, executive director of the Association of School Business Officials International.

For a primer on the teacher supply deduction, here’s a piece from Andrew Ujifusa at Education Week’s Politics K-12:

The bill’s changes would allow teachers to deduct $500 from their taxable income for purchases they make out of pocket for their classrooms, from pencils to software. Current law allows individual teachers to take a $250 deduction for those purchases. The new $500 deduction would take effect for income earned in 2018. The deduction is “above the line” on tax forms, meaning that teachers don’t need to itemize their federal tax returns in order to claim it. The House GOP tax bill, meanwhile, would scrap the deduction.

And for more about those 529 accounts, look to Ron Lieber’s November column in the New York Times:

Now, a quick 529 refresher. You put money in, and in 35 states you get some sort of tax break when you do so, according to Andrea Feirstein, a plan consultant. The money grows tax free, and when you withdraw it to pay for higher-education expenses, you pay no taxes, capital gains or otherwise. So what would it mean to add private school benefits to 529 plans? Take a wealthy family in the highest tax bracket. It has a newborn baby, and through some combination of gifts and its own savings, it opens a 529 plan with $200,000 and never deposits another dime. If the money grows at 6 percent annually, that family could take out the $10,000 each year, avoiding $2,380 in taxes annually. If it did that for 13 years (kindergarten through 12th grade), it would save $30,940 in taxes. Plus, according to numbers that Vanguard ran for me, it would still have enough left over after high school ($370,717) to pay for many pricey private colleges in full, as long as tuition inflation there ran no more than 3 percent annually.

We’ll also be keeping our eye on what the federal tax changes could mean for local schools and the people who depend on them. But with nearly 500 pages and handwritten addendums, it can be hard to know where to look first. So for now, a question: What are you paying attention to? What do you want to learn more about?