Coordination with Coverdell Education Savings Accounts
After 2001, there would be no phase-out of the availability of a Coverdell Education Savings Account
for the couple, and they would receive full benefit of a contribution.
Any remaining qualified expenses may then be allocated and claimed against distributions from Coverdell education savings accounts
and qualified tuition plans; (48)
Coverdell Education Savings Accounts
(CESAs, formerly known as Education IRAs) have been around for awhile.
She played in a key role in developing legislation that created the 529 college savings account and Coverdell Education Savings Account
-- legislation that has been the cornerstone of congressional efforts to help parents save for higher education expenses.
It works like the Coverdell Education Savings Account
, formerly the Education IRA.
For stimulus payments deposited into a Coverdell education savings account
(CESA), the withdrawal can be made by the later of the above date or May 31, 2009.
But while you can't write off your child's parochial school education as a deduction, you can get some tax benefit by establishing a Coverdell Education Savings Account
(formerly an Education IRA that pays qualified education expenses for a designated beneficiary.
However, in 2002, law changes governing these accounts made the Coverdell Education Savings Account
(ESA) an attractive alternative.
After parents and teens have assessed their financial status and anticipated their impending needs, the next step is to compare the benefits of different education savings options, such as a 529 College Savings Plan, custodial account, or Coverdell Education Savings Account
, to determine which is the best fit.
College savings accounts such as a state-sponsored 529 plan or Coverdell Education Savings Account
offer tax-free investment growth potential as long as withdrawals are used for qualified education expenses.
Best of all, those with a 529 plan or Coverdell Education Savings Account
may not be affected at all.