Education Planning
Quick Links
- 529 College Saving Plans
Qualified state tuition programs or 529 College Savings Plans are designed to help people save for the cost of higher, and in some cases, secondary education. 529 College Plans provide several key benefits for investors, including tax savings, flexibility in selecting portfolios management, and offer the ability to control dispersions to beneficiaries. - Education IRAs
A Coverdell Education Savings Account, formerly called an Education IRA, is a trust or custodial account created to pay the qualified education expenses of a designated beneficiary. Parents, grandparents, other family members, friends and children themselves may deposit up to $2,000 per year for each beneficiary under 18 years old provided the total contribution does not exceed the $2,000 limit. - Education Trusts
There are several alternatives for planning for education financing with the use of trusts. Two traditional methods are through the Uniform Gift to Minors Act (UGMA) and the Uniform Transfer to Minors Act that established a simple way for parents to transfer stocks, bonds, mutual funds, annuities, real estate, fine art, patents, copyrights and life insurance policies to their children. Another approach is by use of irrevocable trusts. - Covercdell Education Savings Accounts
A Coverdell ESA, formerly known as an Education IRA, is a trust or custodial account created to pay the qualified education expenses of a designated beneficiary. Parents, grandparents, other family members, friends and children themselves may deposit money for each beneficiary under 18 years old.
Financial Services Education Planning Education IRAs
Education Planning, Education IRAs
A Coverdell Education Savings Account, formerly called an Education IRA, is a trust or custodial account created to pay the qualified education expenses of a designated beneficiary. Parents, grandparents, other family members, friends and children themselves may deposit up to $2,000 per year for each beneficiary under 18 years old provided the total contribution does not exceed the $2,000 limit. The money contributed accumulates tax-free until distribution and the beneficiary will not owe any tax if withdrawn for qualified higher education expenses at eligible educational institutions.
The amounts contributed to one beneficiary can be rolled into an account for another beneficiary. The Hope Scholarship Credit and Lifetime Learning Credit may not be claimed for a student's expenses in a taxable year in which the student takes a tax-free withdrawal from a Coverdall ESA.
If you want to learn more about Coverdall ESA or other educational funding options, give Dugan & Lopatka Financial Services, LLC a call.
Contribution Rules:
- Max $2,000/Year for Any One Beneficiary
- AGI Phase Out Begins at $190,000 (for the Contributor)
- Beneficiary Must Be Under 18 Years Old
- Age Exceptions for Special Needs Beneficiaries
- Must Be Cash
- Must Be Made By Due Date of Contributor’s Return
Dugan & Lopatka Financial Services, LLC104 E. Roosevelt Rd., Wheaton, Illinois 60187Phone: (630) 665-0914Fax: (630) 665-5030
DUGAN & LOPATKA FINANCIAL SERVICES IS NOT AN AFFILIATE COMPANY OF LPL FINANCIAL. SECURITIES AND ADVISORY SERVICES OFFERED THROUGH LPL FINANCIAL, A REGISTERED INVESTMENT ADVISOR, MEMBER FINRA/SIPC.
