Coverdell and 529 Education Savings Plans
Category: Education PlanningTags: Tax Planning Article Highlights: Coverdell Education Savings Accounts Qualified State Tuition Programs (Sec 529 plans) Savings Contribution Limits Gift Tax Issues The tax code provides two primary advantageous ways of saving for your children’s education. We frequently get questions about the differences between the programs and about which program is best-suited for a family’s particular needs. The Coverdell Education Savings Account and the Qualified Tuition Plan (frequently referred to as a Sec 529 Plan) are similar; neither provides tax-deductible contributions, but both plans’ earnings are tax-free if used for allowable expenses, such as tuition. Therefore, with either plan, the greatest benefit is derived by making contributions