For your future graduate.
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.