Can I use a Coverdell ESA to fund my childs private elementary school costs?
Yes, you can. Starting in tax year 2002, a Coverdell ESA can be used not only for higher-education expenses but also for K-12 costs. And qualified primary and secondary education expenses aren’t limited to just tuition, fees and room and board. They also include uniforms, transportation, extended day care, and even home computers. With more qualified reasons for tax- and penalty-free withdrawals, Coverdell ESAs are a smarter way than ever to help fund your child’s education. Can I use a Coverdell ESA in combination with other education savings incentives? Under the old rules, contributions to and distributions from a Coverdell ESA prevented the use of other tax-favored options in the same year — including the Lifetime Learning and HOPE Scholarship tax credits. But starting in tax year 2002, you can claim either of these credits for your child and exclude from gross income any amounts distributed from that same child’s Coverdell ESA. The only caution is you can’t claim a credit and tak
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