Quote:
Originally Posted by sweeps
Don't forget about the Coverdell Savings Account. It tops out at $2000 per child per year, but it is also tax free, and you have choice over the investments. (Mine are at Vanguard, naturally.  ) Also you can use it for elementary and high school education expenses.
The Hope or Lifetime learning credit can be claimed in the same year your child takes a distribution from a 529 or a Coverdell, as long as the same expenses are not used for both benefits.
I can see going with a taxable account over a 529 or Coverdell if you're not sure your kids will go to school. But I think that is unlikely and worst case you have a 10% penalty if you can't transfer the funds to someone else who can use it for education. |
Is the coverdell like a 401k (money in is pre-tax)? Is the coverdell per child or per family? 2k deduction per child per year or 2k deduction per family per year?