A 529 account is a great way to save for education expenses. In a nutshell, once you set aside money in a 529, all earnings — think dividends, interest, investment gains, etc. — are Federally tax-free, as long as you use the funds for specific purposes. That’s a great benefit, especially if you start the account when a child is young, so your gains can compound tax-free.

Recent tax law changes have expanded the purposes for which 529s can be used. In the past, you had to use the money only for post-secondary education, such as college. This remains true. But now, you can also use the money for qualifying education expenses at any level, such as private elementary, middle or high school tuition — not just for college. This is obviously an important new benefit for parents with children in private school.

There are limitations, and every situation is different. Be sure to consult with your tax and financial advisors before making any decision.