Saving For Education Expenses
|Vehicles||Contribution Limits||Control||Uses||Beneficiary||Income Limits||Tax Treatment||Ability to Change Beneficiary|
Contributions are invested and grow federal tax free. 529 higher education savings plans offer maximum flexibility on many levels. CLICK FOR MORE INFORMATION
|$150,000 -$200,000+ Depending on the plan you select May open with $50 to start||Owner maintains control.||Higher educations expenses such as tuition, books, room and board for college or graduate school.||Can be anyone. The beneficiary does not have to be related to you.||No income limits.||Grows tax free from federal tax. Withdrawals for qualified higher education expenses are free from federal tax. Non-qualified withdrawals are subject to income taxes and 10% penalty on earnings.**||Yes, must be blood relation|
|Coverdell Education Savings Account (ESA); formerly Education IRA Education account in which contributions grow tax free. CLICK FOR MORE INFORMATION||2,000 per year, per beneficiary||Owner maintains control until beneficiary reaches age 30.||Education expenses such as tuition, books, room and board for elementary, high school, post secondary, graduate school.||Can be anyone||$110,000 Single
|Grows tax free from federal tax. Withdrawals for qualified education expenses are free from federal tax. Non-qualified withdrawals are subject to income taxes and 10% penalty on earnings**||Yes, must be blood relation|
|Uniform Transfers Minor’s Act (UTMA)
Custodial accounts in which securities are invested on behalf of a minor. CLICK FOR MORE INFORMATION
|No limit.||Custodian maintains control for the minor, until the minor reaches are 21. After age 21 the minor maintains control.||Assets can be used for anything as long as it’s for the minor’s benefit.||Can be anyone||No income limits.||Earnings on the account may be taxable at the minor’s and parents tax rate*||No, once assets are given to a minor they are irrevocable.|
*Consult with your tax advisor for specific tax information and recommendations.
**This tax benefit is effective through 2010 unless extended by Congress.