Coverdell Education Savings Account

(redirected from Education Savings Accounts)
Also found in: Acronyms.

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.

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 Contributions are not tax-deductible, but earnings grow tax-deferred until withdrawn. Money withdrawn prior to the child turning age 30 to pay for elementary, secondary, or postsecondary education expenses after high school is not subject to federal income tax.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.

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.
References in periodicals archive ?
Robert Nichols, R-Jacksonville, said the 101 public school superintendents in his district dislike the education savings accounts but like the provisions that would save small, rural schools money.
41) Nevada recently became the first state to adopt nearly universal education savings accounts.
RELATED ARTICLE: Arizona's Education Savings Accounts
The tax would be refunded for transactions in tax-favored retirement accounts, mutual funds, education savings accounts and health savings accounts.
Among the other provisions of the Farm Bill are the exclusion of retirement and education savings accounts and combat pay when determining eligibility for SNAP.
Common funding alternatives include Education Savings Accounts (ESAs), Section 529 savings plans, and Uniform Transfers to Minors Act (UTMA) accounts.
introduced the 401Kids Family Savings Act of 2007, which would extend the deadline for starting Coverdell Education Savings Accounts for five years through 2015, and rename them 401Kids Family Savings Accounts.
On Sunday, he sought to woo young voters by proposing to create interest-free loans for students who want to set up a business, as well as special education savings accounts.
Aimed at attorneys, accountants, financial planners, and insurance advisors, this resource provides comprehensive coverage of all types of IRAs and Coverdell Education Savings Accounts.
Annual contributions to Coverdell Education Savings Accounts (ESAs, formerly called education IRAs) are limited to $2,000 per year per beneficiary.
CS/SB 660 (Assets Held in Benefit Plans): The bill provides for protection from creditors of those assets held in health savings accounts, medical savings accounts, education savings accounts, retirement "benefit plans," and others maintained in accordance with plans pre-approved by the Internal Revenue Service.
Most students will have to borrow some funds for college, but they and their families can reduce that amount through planned, and often tax-deferred, college savings accounts, including 529 plans and Coverdell Education Savings accounts (ESAs, formerly education IRAs).

Full browser ?