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Anyone under age 70 1/2 who has income from compensation (or who is filing jointly with a spouse who earns compensation).
Anyone who has received a distribution from a qualified retirement plan and decides to roll over the proceeds of the plan into an IRA. |
• $5,000 for 2010 - 2011.
For owners age 50 and older, your limits increase to $6,000 for 2010 - 2011
• Cannot exceed compensation.
•Reduces contributions that can be made to Roth IRAs. |
• Fully-deductible contributions:
-Single individuals not active in employer retirement plans
-Single individuals active in employer retirement plans with MAGI below defined limits.
-Married couples with neither spouse active in an employer retirement plan.
-Married individuals active in employer retirement plans with joint tax as long as MAGI* is below defined limits.
-Married individual not active in employer retirement plans with joint tax returns with a spouse who is, as long as MAGI* is below defined limits. |
• Earnings grow tax-deferred until withdrawn.
• Contributions may be tax-deductible.
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Withdraw penalty-free for any of the following reasons:
•Qualified higher-education expenses.
•First-time home purchase**.
•Age 59 1/2.
•Disability.
•Qualifying medical expenses exceeding 7.5% of adjusted gross income.
•Payment to beneficiaries upon the owner’s death.
•Payment of health insurance premiums while unemployed for 12 weeks or longer.
(withdrawals must begin by age 701/2) |
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• You are eligible if you earn compensation and your MAGI* is less than the defined limits set by Congress. If your MAGI
is too high to contribute the annual contribution limit, you may be able to make a smaller contribution. |
• $5,000 for 2010 - 2011.
For owners age 50 and older, your limits increase to $6,000 for 2010 - 2011.
• Cannot exceed compensation.
•Reduces contributions that can be made to Traditional IRAs.
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•No one can deduct contributions. |
• Earnings are tax-free if account is open for five tax years and withdrawn for qualified reason
(age 59 1/2, disability, death, or a first time home purchase**).
•Not required to start withdrawals at age 70 1/2. |
Regular contributions can be withdrawn tax-free and penalty free at any time.
• After the account has been opened five tax years, earnings can be withdrawn tax-free and
penalty-free for any of these reasons: age 59 1/2, disability, death, or a first time home
purchase**. |
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•Anyone:
- Up to $95,000 (Single filers)
- Up to $190,000 (Joint filers)
• Contributions not allowed after the beneficiary reaches age 18 (except for special needs beneficiaries).
•Reduced contributions allowed for higher incomes:
-Up to $110,000 (single filers)
-Up to $220,000 (joint filers)
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• $2,000 per child each year.
• Limit applies to all Coverdell Education Savings Accounts (ESA) for the same child.
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•No one can deduct contributions. |
•Withdrawals for certain qualified education expenses are tax-free.
•Qualified education expenses included tuition, fees, books,
computer equipment and technology required for elementary, secondary and post secondary education.
• A beneficiary may receive tax-free distributions from a Coverdell ESA in the same year he or she claims the Lifetime Learning or HOPE Scholarship tax credits.
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•Withdrawals are tax- and penalty-free only for qualified education expenses (earnings are subject to tax and penalty for most other
withdrawals).
•Funds can be transferred from one child’s account to an account for another child in the family.
•Distributions must be completed by the age of 30.
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Not intended as tax advice. Please consult a tax professional. |
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* MAGI-modified adjusted gross income from the federal tax form
** Lifetime limit for exemption on first-time home purchase is $10,000
*** Formerly known as the Educational IRA |
