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(1) Coverdell Education Savings Accounts allow income tax-free distribution of earnings to pay a beneficiary's qualified education expenses--pages 315-316.
There is no limit on the amount of a qualified transfer, and qualified transfers may be made in conjunction with other education savings techniques (e.g., annual exclusion gifts and contributions to 529 Plans and Coverdell Education Savings Accounts).
* Coverdell Education Savings Accounts (ESAs): formerly Education IRAs
The contribution amount to a Coverdell Education Savings Account is limited by a taxpayer's adjusted gross income (AGI).
A 529 college savings plan and/or a Coverdell Education Savings Account, if you qualify; are the answers.
* Students receiving tax-free benefits from QTPs will also be allowed to claim the Hope or Lifetime Learning credits or receive a tax-free distribution from a Coverdell Education Savings Account, as long as the different programs do not pay for the same expenses.
Education IRA: The contribution limit for this IRA, renamed the Coverdell Education Savings Account, skyrockets from $500 to $2,000 beginning in 2002.
The Coverdell education savings account (CESA), formerly known as the education IRA, (22) is found under Sec.
A Coverdell Education Savings Account, originally called an "Education IRA," may be created for the purpose of paying the qualified education expenses of a designated beneficiary.
At this point, clients who need to save for future higher education costs should contribute to a 529 plan, even if the contribution provides no state income tax savings, and/or to a Coverdell education savings account. The tax treatment of contributions to a Coverdell account and such a 529 plan are effectively the same as for a Roth IRA, because none of these options provides a tax deduction for a contribution or carries any tax cost on either the investment's earnings or qualified withdrawals.
Her Education Savings for Students Act would increase Coverdell Education Savings Account maximum annual contributions from $2,000 to $5,000.