Saving for Private School Tuition: Coverdell ESA’s made permanent
A quick note this morning on the status of Coverdell Education Savings Accounts:
Coverdell ESA’s were made permanent in the recent fiscal cliff legislation. With tax time upon us, a Coverdell ESA might be a good fit for private school savings plan.
Coverdell ESA’s have a maximum contribution limit of $2000 annually so families won’t be able use a Coverdell ESA for the bulk of their tuition savings. But, every little bit helps.
A few- but not all- Coverdell ESA Basics:
- Coverdell ESA savings can be used to pay for K-12 private expenses and higher education expenses.
- Coverdell ESA eligibility phases out at $110,000 (single filer) and $220,000 (joint filer)
- Families can contribute to both 529 plans and the Coverdell ESA for the same beneficiary.
Remember to check with your accountant/tax advisor as you consider your education savings choices.