The recently passed tax reform seems to be crowding out Christmas. Instead of stories of acts of kindness that seem to be on the uptick this time of year (I just experienced a rather small but maybe significant one on an airplane where a person gave up his first class seat to one of our armed services personnel who was heading home from the Middle East for Christmas). Please don’t misunderstand my opening line, I am not against tax reform, I simply do not like anything crowding out Christmas. Especially taxes.
However, the recent legislation is probably why the word “tax” jumped out at me as I read Luke 2 for the first time this season. Luke 2:1 “And it came to pass in those days, that there went out a decree from Caesar Augustus, that all the world should be taxed.” I think I have simply accepted that word in the greater context of the story, not stopping to think about how this process may have happened in a world without formally-trained CPAs and TurboTax. After digging a bit, I have discovered that there is a little controversy (why not?) around whether this actually happened and how it might have happened.
Taxes seems to be accompanied by controversy. I don’t think that will change anytime soon. However, we can be wise as serpents and gentle as doves in our approach to how Christian education is paid for. I think this includes understanding the tax system that we are held accountable to. The recent tax reform included an addition to 529 Savings Accounts that in my opinion, is a step in the right direction. The final tax bill would allow tax-advantaged college savings plans known as 529s to also cover up to $10,000 a year in K-12 public, private and religious school expenses. 529s allow families to invest their after-tax money into a college savings plan and through compound interest, accrue earnings rapidly over time. Families pay no taxes on those earnings. State administrators of those plans are looking closely at what this change means for their individual states but this bill appears to have some significant tax savings at the state and federal level. Christian schools would be wise to publish this information to school families (grandparents can also create 529s for their grandchildren!) sooner than later. Families might also consider a 529 in their year-end financial planning due to the standard deduction increase in 2018, up from $12,700 to $24,000 for married couples.
I hope the tax reform noise does not crowd out any part of Christmas for you and your family. But if this reform can provide additional means for more families to send their children to a Christian school, a place where they are invited to see the Christmas story and live out that story in gratitude and obedience to our Savior, bring it on!
A very Merry Christmas and blessed 2018 to you, your families, and your schools.
Dr. Tim Van Soelen
Director of the Center for the Advancement of Christian Education.