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Beware Rule Changes on Coverdells (Wall Street Journal)
“Families interested in opening a Coverdell Education Savings Account this year for college savings should consider doing so before April 15,” the Wall Street Journal reports. “That would allow them to invest as much as $4,000 in one of these tax-advantaged accounts this year — twice the maximum for annual contributions — since money deposited before April 15 can be counted against the previous year’s limit. But families planning to use a Coverdell account to pay for pre-college education expenses should think twice about opening or contributing to an account this year. Starting next year, withdrawals from Coverdells to pay expenses from kindergarten through 12th grade will no longer be tax-free, unless Congress acts to extend that benefit, which is not a sure thing.”
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Beware Rule Changes on Coverdells (Wall Street Journal)