Coverdell Education Savings Account

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Coverdell Education Savings Account

An account into which one may deposit funds on a tax-deferred basis, on the assumption that they will be used to pay for the education of the account holder. The funds are invested in a portfolio, much like an IRA or another retirement account. If the funds are in fact used for education, withdrawals from a Coverdell account are tax-exempt up to the total cost of education. Importantly, any tax liability on a Coverdell account is assessed at the account holder's bracket, rather than the contributor's. This protects the account holder from an excessive tax liability in the event a wealthy parent made most or all of the contributions. It was formerly called an education IRA.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Coverdell Education Savings Account

A special individual retirement account opened on behalf of a child under age 18. Contributions of up to $2,000 annually may be made by anyone who meets specified income limits. Contributions are not tax-deductible, but earnings grow tax-deferred until withdrawn. Money withdrawn prior to the child turning age 30 to pay for elementary, secondary, or postsecondary education expenses after high school is not subject to federal income tax. Formerly called Education IRA.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Coverdell Education Savings Account (ESA)

A tax-favored savings plan under which any number of taxpayers may contribute up to a total of $2,000 per year per eligible beneficiary. Contributions are nondeductible. Earnings withdrawals are tax free and penalty free if they do not exceed the amount of qualified education expenses for the year.
Copyright © 2008 H&R Block. All Rights Reserved. Reproduced with permission from H&R Block Glossary
References in periodicals archive ?
A host of parents that utilize the ESA program said there are other key provisions in SB1395 that will ensure they're using the program's funding responsibly and efficiently.
While an ESA is a type of tax-preferred account, the client who uses his or her RMDs to fund the ESA is still required to pay tax on the RMDs at his or her ordinary income tax rates--the transfer is not a tax-free rollover.
Relationship between ESAS and other payment systems
The team at the Fairfield Satellite Haemodialysis Unit identified a number of target areas where they sought to improve current practice relating to ESA administration, including achieving better ESA dosing compliance (a reduction in missed doses), more efficient use of staffing and unit resources, and improved hemoglobin control, in comparison to that achieved using existing ESA dosing regimens.
A Coverdell ESA, on the other hand, is like an IRA, so you can pick your own investments.
* ESAs should be discontinued after six to eight weeks if the Hb level does not increase by 1-2 g/dL or in the absence of a reduced need for transfusions.
During the structured interview, patients were asked about: their current ESA use; the extent to which sc ESA administration caused them concern, discomfort or pain; their preference regarding ESA treatment; and their involvement in ESA treatment decisions.
The FDA will have internal meetings about the panel's recommendations and meet with ESA manufacturers to discuss labeling changes but will probably issue interim recommendations for physicians before the final changes are made.
The new boxed warning also clarifies that ESAs should only be used in patients with cancer when treating anemia specifically caused by chemotherapy and not for other causes of anemia.
Qualified education expenses under Coverdell ESAs include elementary and secondary school (i.e., grades K-12) expenses, as well as higher education costs.
In March 2007, and again in November 2007, the FDA issued a black box warning on how to safely and effectively use ESAs. This warning notes that patients with renal failure experienced greater risks for death and serious cardiovascular events when administered an ESA to target higher versus lower Hb levels (13.5 vs.
The FDA announced last month that it okayed revisions to the boxed warnings and other safety-related changes in the labels of the erythropoiesis-stimulating agents (ESAs).