|
You can contribute up to $2,000 a year to an education savings account. A child can have more than one education savings account, but the total contributions in aggregate to all accounts cannot exceed $2,000 a year.
You can contribute up to the $2,000 limit for each of your children. So for example, if you have two children you can contribute $2,000 to a separate education savings account for each of them.
You can contribute to an education savings account anytime after a child is born until the child’s 18th birthday, although you don’t have to make a contribution every year. You can continue to make contributions beyond age 18 for special needs beneficiaries.
The contribution deadline for a given tax year is generally April 15th of the following year.
You can invest your contributions in any qualifying investments available through the education savings account custodian, including certificates of deposit/share certificates, mutual funds, stocks, and bonds. Life insurance is not a qualifying investment.
If you’re eligible, you can claim the Hope credit or Lifetime Learning credit in the same taxable year you take qualified withdrawals from an education savings account for the same student. The credit and the withdrawal have to be used for different education expenses, however.
If you’re eligible, you can make a contribution to both an education savings account and a 529 college savings program for the same beneficiary in the same tax year.
Contributions to an education savings account are eligible for the gift tax exclusion.
Article is for educational purposes only and is not intended to provide specific tax or legal advice. For answers to tax questions, please see your tax professional. For legal questions, consult an attorney.
Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free (800) 369-2862. Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America. The Representative may also be a credit union employee that accepts deposits on behalf of the financial institution.
|
|
|
©1997-2009 CUNA Mutual Group.
|
|
