Comments on: What’s the Differences Between Coverdell Education Savings Accounts vs 529 College Savings Plans?

By: Jeff Rose

Jeff Rose — Wed, 31 Oct 2018 23:22:46 +0000

In reply to Dr Stephen J Smith. Hi Stephen - They're not tax deductible, but the investment income does accumulate on a tax-deferred basis.

By: Dr Stephen J Smith

Dr Stephen J Smith — Sun, 28 Oct 2018 17:59:14 +0000

Dear Jeff,
Great info but you did not make clear whether or not ESA contributions are tax deductible for the Donor on their Federal tax returns. Are they deductible?
I know that 529 contributions are deductible on CO State returns but NOT
On Federal returns- correct??
Thanks!
Steve Smith

By: Dr Stephen Smith

Dr Stephen Smith — Sun, 28 Oct 2018 17:48:43 +0000

Thank you!!!
Great info on ESA’s and 529 college funds!!!!

By: Todd Weaver

Todd Weaver — Wed, 30 Oct 2013 14:13:00 +0000

Jeff and Michael,

This is a very helpful article! I know it was written a year and a half ago, but it is very relevant.

I had a client with a 529 UTMA/UGMA account this past year, that was having difficulty filling out the financial aid forms, due to the way some colleges will choose to categorize 529 accounts.

I wrote a couple of blog posts that may be of interest to you both, as well as your clients.

http://www.collegesearchgameplan.com/are-all-529-college-savings-plans-equal-in-the-eye-of-the-financial-aid-office-not-necessarily

http://www.collegesearchgameplan.com/feedback-on-our-post-on-college-529-utma-savings-plans-could-this-happen-to-you

I hope they are helpful!

By: Jeff Rose

Jeff Rose — Tue, 26 Feb 2013 15:58:49 +0000

In reply to Carina. @ Carina I just this update from the IRS that might answer your question: http://www.theslottreport.com/2013/02/revised-ira-publication-addresses-key.html

By: Carina

Carina — Wed, 20 Feb 2013 05:38:24 +0000

Hi Jeff. Great article, but I am wondering if the 2013 Coverdell changes you were referring to didn’t take place? According to this article, they didn’t: http://www.forbes.com/sites/ashleaebeling/2013/01/14/new-tax-law-resurrects-competitor-to-529-college-savings-plans/. Is it a good idea to use both plans, especially if you use a Coverdell for k-12 private tuition then a 529 for college?

By: Ryan

Ryan — Mon, 17 Sep 2012 14:36:26 +0000

What about when the benficiary fills out FAFSA do both the ESA and the 529 plan count againt the expected family contribution?

By: Jeff Rose

Jeff Rose — Tue, 17 Jul 2012 02:30:23 +0000

In reply to Joseph Taylor. @ Joseph Yes, there is a possibility that some changes may occur with the Coverdell 529 that make it not as attractive. Check out this post that summarizes some of the potential tax changes: http://blog.heritage.org/2012/03/26/changes-to-coverdell-education-savings-account-unwise-and-unfair/

By: Joseph Taylor

Joseph Taylor — Thu, 12 Jul 2012 01:04:10 +0000

Hey Jeff,
My daughter is starting my granddaughter in private school; kindergarten. I started a Coverdell about 4 1/2 years ago so I can utilize those funds for the granddaughters tution, including expenses. But I read that in 2013 that the Coverdell may have some changes done through Congress?

By: Lynne

Lynne — Sat, 14 Apr 2012 20:40:08 +0000

Can either the ESA account or 529 plan be used for a down payment on a home for a grad student?