Much like a Roth IRA, the benefits of a Coverdell Education Savings Account from FTB Advisors, Inc. include tax-deferred earnings and tax-free qualified withdrawals.
To help you plan ahead for this significant event, a Coverdell account should be part of your comprehensive financial plan.
Designed to help keep up with the rising costs of college education, you as the donor maintain control of a 529 Educational Savings Plan. A tax-advantaged investment, the 529 Savings Plan has no income or age restrictions, so it's easy to provide a solid foundation for your child's college education.
Contributions are considered completed gifts so a donor can make a maximum annual contribution of $14,000, or $70,000 ($140,000 for a joint gift) in one year using a prorated Annual Exclusion gift for five consecutive years
|Who can contribute?||Contribution limit||Qualified distributions||Income tax considerations|
||Federally tax-free if used for qualified education expenses.|
|Coverdell Savings Accounts|
|Anyone (certain income limitations may apply)||
||Federally tax-free if used for qualified education expenses, including primary and secondary education.||