tax deductible? can it be set aside in a special account? or is this just wishful thinking?
not college, but undergrad.
not college, but undergrad.
is money saved for private school tuition
- Thread starter ELVIS
- Start date
Look into a Coverdale savings plan. Used to be called an Education IRA.
Here is some info on a few outside of the 529 that may help.
Covering Coverdales
Coverdale Education Savings Accounts are a good option if you don't have a lot of money to invest but many years until college funds are needed. These accounts allow investments of up to $2000 per year per student.
Earnings grow tax-free as long as they are used for eligible expenses, which include higher education as well as elementary or secondary school (tuition, uniforms, transportation, etc.) Contributors must earn less than $110,000 for single filers and $220,000 for married couples. Coverdale ESAs are considered assets of a student and may affect financial aid.
Ready for Roth?
Roth IRAs (maximum contribution $3,000 per year) offer no tax deduction for contributions but future earnings are sheltered from taxes. These accounts are a good option if you're saving for both retirement and college or if you will be older than 59 1/2 when withdrawing funds.
One advantage of Roth IRAs is the waived 10 percent early withdrawal penalty when funds are used for qualified higher-education expenses. But regular income tax applies for withdrawals prior to age 59 1/2. And not everyone can contribute. "Roth IRAs have income limitations," says Feyche. "Right now to make the maximum annual contribution singles must have an adjusted gross income of $95,000 or less and couples $150,000 or less."
Using Uniform Transfer to Minor's Accounts
These accounts allow minors to own stocks and bonds. "With a UTTM account, you're basically making a monetary gift to a minor," says Feyche. "If the child is under 14, the income is taxed at the parent's highest rate for income in excess of $1,500. But once the child is 14 (or over) funds are taxed at the child's own rate."
A UTTM account can be opened at a bank, mutual fund or brokerage firm. Singles can contribute up to $11,000 per year and married couples $22,000 without gift tax (or $55,000 and $100,000 respectively if no additional contributions are made for five years).
The big downside to a UTTM account is that the child controls the assets at age 18. Funds that were earmarked for college can now be used for a trip to Mexico, a new car, etc..
Here is some info on a few outside of the 529 that may help.
Covering Coverdales
Coverdale Education Savings Accounts are a good option if you don't have a lot of money to invest but many years until college funds are needed. These accounts allow investments of up to $2000 per year per student.
Earnings grow tax-free as long as they are used for eligible expenses, which include higher education as well as elementary or secondary school (tuition, uniforms, transportation, etc.) Contributors must earn less than $110,000 for single filers and $220,000 for married couples. Coverdale ESAs are considered assets of a student and may affect financial aid.
Ready for Roth?
Roth IRAs (maximum contribution $3,000 per year) offer no tax deduction for contributions but future earnings are sheltered from taxes. These accounts are a good option if you're saving for both retirement and college or if you will be older than 59 1/2 when withdrawing funds.
One advantage of Roth IRAs is the waived 10 percent early withdrawal penalty when funds are used for qualified higher-education expenses. But regular income tax applies for withdrawals prior to age 59 1/2. And not everyone can contribute. "Roth IRAs have income limitations," says Feyche. "Right now to make the maximum annual contribution singles must have an adjusted gross income of $95,000 or less and couples $150,000 or less."
Using Uniform Transfer to Minor's Accounts
These accounts allow minors to own stocks and bonds. "With a UTTM account, you're basically making a monetary gift to a minor," says Feyche. "If the child is under 14, the income is taxed at the parent's highest rate for income in excess of $1,500. But once the child is 14 (or over) funds are taxed at the child's own rate."
A UTTM account can be opened at a bank, mutual fund or brokerage firm. Singles can contribute up to $11,000 per year and married couples $22,000 without gift tax (or $55,000 and $100,000 respectively if no additional contributions are made for five years).
The big downside to a UTTM account is that the child controls the assets at age 18. Funds that were earmarked for college can now be used for a trip to Mexico, a new car, etc..
DOUGHBOY, thank you very much. if you want to get in touch you are welcome to my email from jack.
also, am i correct in assuming secondary education includes private school? and elementary expenses are grades 1-4 or are they higher?
by the way, love irons - hope he sticks around for a couple of more years.
also, am i correct in assuming secondary education includes private school? and elementary expenses are grades 1-4 or are they higher?
by the way, love irons - hope he sticks around for a couple of more years.
My wife is a teacher and she says k-5 is considered elementary, secondary is 6-12.
You should be fine with private school wiith the Coverdale. It's your money, and as long as the expenses are qualified, you're ok.
I also am really excited about Irons, and the direction our program is headed. I hope we are top 5 preseason next year. I really think we could make some noise in the next few years. If you have any more questions, I would be glad to help.
You should be fine with private school wiith the Coverdale. It's your money, and as long as the expenses are qualified, you're ok.
I also am really excited about Irons, and the direction our program is headed. I hope we are top 5 preseason next year. I really think we could make some noise in the next few years. If you have any more questions, I would be glad to help.
ONE MORE QUESTION. is the coverdale a no taxed item as you invest in it? ie. can i reduce my taxable income by investing in a coverdale?
thanks Rich
thanks Rich
At the risk of "butting in"-
The Coverdale contributions would NOT be tax deductible, however the earnings could be withdrawn tax-free if they are qualified-expenses.
"Qualified" expenses (for the purpose you mentioned) include tuition, fees, tutoring, books, supplies, and equipment incurred in connection with school (GRADES K THROUGH 12). It also includes any room and board, uniforms, transportation and supplementary items which are required or provided by the school. Finally, it includes expenses for the purchase of computer technology or equipment, or Internet access, used by the beneficiary and family during the years the beneficiary is in school.
One thing to be careful of is that there is a "Sunset" provision on these benefits. Unless Congress passes additional legislation, these benefits EXPIRE at the end of 2010 and the contribution limit per year decreases back to $500/ yr.
The Coverdale contributions would NOT be tax deductible, however the earnings could be withdrawn tax-free if they are qualified-expenses.
"Qualified" expenses (for the purpose you mentioned) include tuition, fees, tutoring, books, supplies, and equipment incurred in connection with school (GRADES K THROUGH 12). It also includes any room and board, uniforms, transportation and supplementary items which are required or provided by the school. Finally, it includes expenses for the purchase of computer technology or equipment, or Internet access, used by the beneficiary and family during the years the beneficiary is in school.
One thing to be careful of is that there is a "Sunset" provision on these benefits. Unless Congress passes additional legislation, these benefits EXPIRE at the end of 2010 and the contribution limit per year decreases back to $500/ yr.
