Coverdell Education Accounts*

Save Toward A College Education

Contributions may be made to your Educational IRA until December 31st of the tax year. Parentts, grandparents, other relatives, friends, and even minors (with earned income) can set up an account for any designated beneficiary under age 18. You can make nondeductible contributions of up to $500 per child each tax year. The accumulation of interest and withdrawals are tax-free as long as the funds are used for qualified, higher education costs.

If the beneficiary is not going to use the money for education expenses, it must be withdrawn by age 30. The Coverdell Education Account can be rolled over into another child's account in the same family. The contributions to this account do not count toward your $2,000 single taxpayer or $4,000 married taxpayer (filing jointly) IRA contributions. You can save for a child's education and maximize your own IRA every tax year.

2002 Tax Law IRA Provisions
• Coverdell Education Account contributions will increase to $2,000 a year beginning in 2002.

*Formerly the Education IRA.