The Tax Increase Prevention Act of 2014 includes a section that authorizes tax-favored accounts for disabled individuals who can use the money in these accounts to pay for qualified expenses.

The "Achieving a Better Life Experience (ABLE)" accounts are designed around the tax framework of Section 529 college savings plans. The 2014 law authorizes these accounts beginning January 1, 2015.

Qualified distributions from the 529-ABLE, such as transportation and housing as well as education and medical expenses, will be tax-free. Nonqualified distributions will be subject to income tax, plus a 10% penalty.

Contact our office if you would like more details about ABLE accounts.

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