Coverdell Education Savings
The costs of higher education can be staggering. One way to help keep your kids or grandkids from being saddled with huge student loans is to open a Coverdell Education Savings account. A Coverdell Education Savings account (CESA, formally known as an Education IRA) is an account created as an incentive to help parents and students save for education expenses.
- Total contributions for each student cannot be more than $2,000 in any year, no matter how many accounts have been established.
- Contributions to a Coverdell ESA are not deductible, but amounts deposited in the account grow tax free until distributed.
- The student will not owe tax on the distributions if they are less than their qualified education expenses at an eligible institution.
- This benefit applies to higher education expenses as well as to elementary and secondary education expenses.
To find out if a Coverdell Education Savings Account is right for your young student, give us a call at 972-715-4444. Our financial experts can help you find the right plan.