Benefits of a Coverdell ESAThis article is not intended to provide tax advice. Contact a tax professional.
Save up to $2,000 per child per year in a Coverdell Education Savings Account (ESA) at Red Crown Credit Union. There are a number of benefits to a Coverdell ESA.
While your contributions are made with after-tax dollars, the earnings and withdrawals are tax-free when used for qualified educational expenses. And you and your family members can contribute to the account, up to the $2,000 total annual limit.
You can continue saving each year until the child reaches 18. When the money is withdrawn, it can be applied to a broad range of qualified expenses for college and public or private K-12 education - including tuition, tutoring, room and board, and even computer equipment.
A unique Coverdell ESA feature is your ability to transfer funds from one child's account to another child's account in the same family. Also, contributions can be made on behalf of the same child to both a Coverdell ESA and a 529 plan.
To learn more about Coverdell ESAs, call one of our specialists today at (918) 477-3200 or (800) 318-7228.
Information obtained from Ascensus, Inc.