New York - The Education IRA is a separate IRA account for a named beneficiary to save for higher education. This account is funded by non-tax deductible contributions.
Earnings of this account are subject to inclusion in gross income and an additional 10% tax upon distribution should it exceed qualified higher education expenses. The following are other key characteristics:
-
Contributions of up to $500 annually are allowed which is in addition to the $2,000 regular IRA limit.
-
Contributions may be made regardless of whether the beneficiary has gross income
-
Contributions may not be made after the beneficiary has reached 18
-
Income limitations for contributions begin at $150,000 for married taxpayers filing jointly and $95,000 for single taxpayers.
The key benefit of the account is the tax-deferred aspect of the earnings whether capital gains or dividends until the year of distribution.
An independent Fee-Only financial adviser can help you determine the most appropriate IRA strategy.
________________
About Us
Founded in 1998, The Independent Adviser Corporation has assisted thousands of individuals, families, and businesses. We are 100% independent and objective and offer free private consultations to our clients. Our company publishes free investment research and educational materials, and when specific financial or legal advice is needed, we connect clients with a network of FEE-ONLY professionals. For more information, become a member or to schedule a free consultation, please visit our website at TheAdviser.com or 1800ADVISER.COM.