{"id":5244,"date":"2021-05-31T21:04:20","date_gmt":"2021-05-31T21:04:20","guid":{"rendered":"http:\/\/www.quicksetupguide.com\/blog\/?p=5244"},"modified":"2021-05-31T21:42:50","modified_gmt":"2021-05-31T21:42:50","slug":"529-vs-coverdell-esa","status":"publish","type":"post","link":"https:\/\/www.quicksetupguide.com\/blog\/2021\/05\/31\/529-vs-coverdell-esa\/","title":{"rendered":"529 vs Coverdell ESA"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Both 529 plans and Coverdell Education Savings Account (ESA) are college saving plans with&nbsp;tax benefits. They can be used to help pay for education costs. However, there are a few important distinctions such as contribution amounts, contribution restrictions, and investment options.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Contribution amounts.<\/strong>\u00a0Unlike a 529 plan where a donor can contribute up to the gift tax exemption amount without having to file tax paperwork ($10,000 in 2021 for an individual and $20,000 for a married couple in Illinois), a Coverdell ESA limits the total amount contributed for any one beneficiary to $2,000 per year.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Contribution restrictions.<\/strong>&nbsp;With a 529 plan, there are no income level restrictions for contributions while a Coverdell ESA, if your adjusted gross income exceeds $110,000 for an individual, or $220,000 for a married couple filing a joint return, you\u2019re not eligible to use a Coverdell at all.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Investment <\/strong>flexibility<strong>.<\/strong>&nbsp; With a Coverdell ESA, you can pick specific investments you like while a 529 plan is limited to the investments that the state-sponsored plan offers. <\/li><li><strong>Tuition vs Expenses.<\/strong>&nbsp; A 529 plan, when used for elementary and secondary schools only, is limited to tuition, while a Coverdell ESA can pay for elementary or secondary school tuition and expenses as well.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Tax Benefits<\/strong>.  Both 529 savings plans and Coverdell ESAs are&nbsp;after-tax\u00ad&nbsp;accounts. However, for a 529 plan, many states do offer a current-year&nbsp;<em>state<\/em>&nbsp;tax deduction for contributions.  <\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Both 529 plans and Coverdell Education Savings Account (ESA) are college saving plans with&nbsp;tax benefits. They can be used to help pay for education costs. However, there are a few important distinctions such as contribution amounts, contribution restrictions, and investment options. Contribution amounts.\u00a0Unlike a 529 plan where a donor can contribute up to the gift &hellip; <a href=\"https:\/\/www.quicksetupguide.com\/blog\/2021\/05\/31\/529-vs-coverdell-esa\/\" class=\"more-link\">Continue reading <span class=\"screen-reader-text\">529 vs Coverdell ESA<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-5244","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.quicksetupguide.com\/blog\/wp-json\/wp\/v2\/posts\/5244","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.quicksetupguide.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.quicksetupguide.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.quicksetupguide.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.quicksetupguide.com\/blog\/wp-json\/wp\/v2\/comments?post=5244"}],"version-history":[{"count":10,"href":"https:\/\/www.quicksetupguide.com\/blog\/wp-json\/wp\/v2\/posts\/5244\/revisions"}],"predecessor-version":[{"id":5259,"href":"https:\/\/www.quicksetupguide.com\/blog\/wp-json\/wp\/v2\/posts\/5244\/revisions\/5259"}],"wp:attachment":[{"href":"https:\/\/www.quicksetupguide.com\/blog\/wp-json\/wp\/v2\/media?parent=5244"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.quicksetupguide.com\/blog\/wp-json\/wp\/v2\/categories?post=5244"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.quicksetupguide.com\/blog\/wp-json\/wp\/v2\/tags?post=5244"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}