10/01/2024
Info: There are 3 significant types of savings/investment accounts for education. Coverdell (Education IRA), the 529 Plan, and UGMA/UTMA the Uniform Gift to Minors Act/Uniform Transfers to Minor Act. Today just a few facts about Coverdells.
After-tax contributions of up to $2,000 per student per year for children until age 18. Contribution limits may be reduced or eliminated for higher-income taxpayers.
Growth and income within the portfolio are deferred. No tax deductions.
Distributions tax free if used for qualified expenses. College, secondary or elementary school.
If a student’s account is not depleted by age 30, the funds can be rolled into an Education IRA for another beneficiary.