At a recent seminar hosted by StoneBridge School in March, attendees were introduced to a powerful idea: what if the money you’re already required to pay in taxes could be redirected to benefit your family and your community?
Led by Director of Advancement Sara Gainor, the seminar focused on practical, forward-thinking strategies to help families maximize their financial resources, especially when it comes to education. The message was simple but impactful: with the right planning, you can take control of your tax dollars and put them to work in ways that align with your values.
Planning Ahead Starts Now
One of the central themes of the seminar was timing. With much of the year still ahead, families have a valuable opportunity to plan proactively rather than reactively.
Instead of scrambling during tax season each year, attendees were encouraged to think now about how their income, giving, and investments can be structured to reduce tax liability while supporting meaningful causes, like education.
“We all pay taxes,” Gainor noted, “but how can we make that money work for us?”
Turning Taxes into Opportunity: The State Tax Credit
A major focus of the seminar was Virginia’s Education Improvement Scholarship Tax Credit (EISTC), a program that allows individuals and businesses to redirect state tax dollars toward private school scholarships.
Here’s how it works: when you contribute to an approved scholarship organization, you receive a 65 percent credit against your Virginia state taxes. The remaining 35 percent can often be deducted as a charitable contribution on your federal taxes.
In practical terms, this can significantly reduce the true cost of giving.
SBS parent David Thompson, who has one SBS alumn and one current SBS junior, shared his firsthand experience. After initially feeling the financial strain of private education, his perspective shifted over time.
“What started as just trying to make it work turned into gratitude,” he explained. “You see the impact on your kids, and you want to give back.”
He described the tax credit program as a “no-brainer,” noting that a $10,000 contribution could effectively cost only a fraction of that amount after credits and deductions.
The takeaway? Instead of sending tax dollars entirely to the state, families can redirect a portion to support students and schools they care about while still benefiting financially.
A Real-World Example
To make the concept more tangible, the seminar introduced a hypothetical family earning $150,000 annually. After taxes, they take home about $115,000.
If this family contributes $10,000 through the tax credit program, they receive a $6,500 state tax credit. The remaining $3,500 may be deducted federally, reducing their overall tax burden even further. In the end, the net cost of that $10,000 gift could be closer to $2,700.
For families looking to eliminate their state tax liability entirely, larger contributions can be strategically planned to offset what they owe.
The key insight: with intentional planning, giving and saving are not mutually exclusive, they can work together.
Leveraging 529 Plans for Flexibility
Another important tool discussed was the 529 education savings plan. While traditionally associated with college savings, 529 plans can now be used for K-12 private school tuition as well. Families can withdraw up to $10,000 per year per child (recent updates may increase this limit) to cover tuition and certain educational expenses, including books and tutoring.
Although 529 contributions offer a smaller tax benefit compared to credits–they reduce taxable income rather than providing a direct credit–they still offer meaningful advantages.
For example, contributions grow tax-free, and withdrawals for qualified expenses are also tax-free. Additionally, families can use these funds to offset monthly tuition costs, effectively easing cash flow.
One creative strategy discussed involved contributing regularly to a 529 plan and then using those funds the following year to pay tuition. This approach not only builds savings but also creates a cycle of financial flexibility.
Even more compelling, unused 529 funds can now be rolled into a Roth IRA for the beneficiary (up to certain limits), offering a long-term investment in a child’s future beyond education.
Looking Ahead: Federal Tax Credit Opportunities
The seminar also introduced a new and emerging opportunity: a federal scholarship tax credit program expected to launch in 2027.
This program would allow individuals to receive a dollar-for-dollar federal tax credit–up to $1,700–for contributions supporting K-12 education. Unlike the state program, this credit applies directly to federal taxes and is not limited by state residency.
While details are still being finalized, the potential impact is significant. Families could reduce their federal tax liability while contributing to educational access and support. The key, once again, is preparation. Understanding how and when to participate will be critical to maximizing the benefit.
Practical Tips for Getting Started
Throughout the seminar, several practical takeaways emerged:
- Start early: Waiting until the end of the year can limit your options and create unnecessary stress.
- Estimate generously: When applying to reserve tax credits, it’s better to overestimate your intended contribution to avoid missing out on benefits.
- Consult experts: Financial advisors and CPAs can help tailor these strategies to your specific situation.
- Stay organized: Many programs, like the tax credit programs, require pre-authorization or have deadlines that must be met to qualify.
A Mindset Shift
Ultimately, the seminar was about more than tax strategies, it was about stewardship. Families were encouraged to rethink how they view their financial obligations. Instead of seeing taxes as a fixed burden, they can be approached as an opportunity to invest in what matters most.
“This is your money,” Gainor emphasized. “And if you can learn even one way to make it work better for you, then we’ve done our job.”
By combining thoughtful planning with available financial tools, families can not only reduce their tax burden but also make a lasting impact on their children, their community, and future generations.
Feature image photo credit: Unsplash, Scott Graham.
