|
Pay for College Tuition with a Coverdell Education Savings Account
College tuition is rapidly rising every year. It is a good idea to start an education savings fund for a child, so that they can pay for future college expenses. This will help parents save money now for their child’s future. A Coverdell Education Savings account can help a parent pay for their child’s education. Here are some of the basics of a Coverdell Education Savings account:
-It is a savings account intended to help parents save for their child’s college expenses.
-A beneficiary of the account should be under 18 or be a beneficiary with special needs.
-There can only be a $2,000 dollar contribution in a given year.
-Tuition and fees are qualified education expenses and these distributions are tax-free.
-There is not any tax on distributions for colleges that are considered eligible institutions.
Someone who is considering starting one of these savings accounts should first explore their options. Someone who is looking into these options should talk to qualified people who know about these types of accounts. These people will help a person read through the IRS tax information and make sense of the information.
| 
