View Full Version : High School as well as College Savings Plan?
Unregistered
I'm wondering if there are any state plans that will allow you to utilize the savings for high school as well as college?
Thanks
Kris Davis
The states' 529 plans must be used for college expenses. But you can save for private high school expenses in a Coverdell Education Savings Account (what used to be called an Education IRA). As with 529s, the earnings in an ESA are tax-free when used for qualified expenses. The drawbacks, compared with 529s, are a $2,000 per year per beneficiary cap on contributions, and an income ceiling on who can contribute (you're locked out if you earn more than $95,000 and file a single tax return or more than $190,000 if you are married filling jointly.)
Unregistered
Kris,
Could you expound more on the CESA for private schools - elementary and high school (tuition & such), i.e., tax advantages. Can you put the $2,000 in pretax? and if so how. The limits you mentioned would not affect me.
Regards from Michigan
Kris Davis
No, sorry, you can't put the $2,000 in pretax. The tax advantage is that the earnings are tax-free on withdrawals for qualified expenses. In the case of CESAs, that includes elementary and high school tuition, plus outlays for room, board, books, supplies and equipment--even uniforms, tutoring and computer equipment and software (subject to some guidelines.)
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