The Coverdell Education Savings Account …what is it?
A. A Coverdell Education Savings Account is a savings account created as an incentive to help parents and students save for education expenses. · The total contribution for a beneficiary under the age of 18 (or qualifies as a special needs beneficiary) of an account may not be more than $2,000 in any year, no matter how many accounts have been created. The beneficiary will not owe tax on the distributions if, for a year, the distributions from an account do not exceed the beneficiary’s qualified education expenses at an eligible education institution. The benefit applies to higher education, elementary and secondary education expenses. · In most cases an individual or the beneficiary may contribute to a Coverdell ESA if the individual’s modified adjusted gross (MAGI) income qualifies according to the current years limits. · Visit the IRS site for rules on determing your MAGI for the purpose of determining your maximum contribution limit: http://www.irs.gov. · Distributions are tax-free