Educational IRA
The Educational IRA, recently renamed the Coverdell Education Savings Account, is a type of tax-advantage savings account created by the Taxpayer Relief Act of 1997. This IRA's sole purpose is to help you pay for your child's education expenses such as: tuition, fees, books, supplies, equipment, and, in some cases, room and board and computers. These options were improved by the Economic Growth and Tax Relief Reconciliation Act of 2001. Although contributions to an Education IRA are not tax-deductible, your withdrawals, including earnings, are tax-free if used for tuition, books, and other qualified higher-education expenses.
Contact your tax advisor for deductibility of IRA and SEP contributions and tax deferral on earnings.
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