Formerly known as an Education IRA, a Coverdell Education Savings Account is designed to help you prepare for a child's future education. As with the 529 Plan, anyone can contribute to the account (income limits apply) - parents, grandparents, relatives - and distributions for qualified education expenses are income tax free. Education expenses may be used not only for higher education, but also for elementary and secondary school as well. The maximum amount a child may receive is $2,000 per year. Contributions for the tax year may be made up to the tax return due date of the contributor. Also, you can make a contribution to both a Coverdell Education Savings Account and a 529 Plan in the same year for the same beneficiary.

Questions or to open a Coverdell Education Savings Account:

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