San Diego, California has many schools. In San Diego, there are public schools and private schools. The are schools in San Diego in the University of California San Diego system and also in the San Diego State system as well as the University of San Diego and other schools which are private.
As an estate planning tool in San Diego, for individuals who want more control over their investments, a Coverdell Education Savings Account (formerly called an “Education IRA”) may be an attractive alternative to a 529 plan. A contributor to a Coverdell account can choose investments and change them, depending on his or her investment strategy. Earnings are tax-free as long as they are used for qualified education expenses. The 2001 tax law also has improved this method of saving for elementary, secondary, and college education costs. Beginning January 1, 2002, the annual limit on contributions will increase from $500 to $2,000.
An increase in the phase-out income range for married taxpayers filing jointly will allow more taxpayers to contribute to a Coverdell account. For beneficiaries with special needs, rules stopping contributions when the beneficiary turns 18 and requiring that the account be emptied when he or she turns 30 have been removed. As with 529 plans, a contributor to a Coverdell account can claim an education tax credit, though not for the same educational expenses for which Coverdell account money was used.
One note of caution: The changes to both 529 plans and Coverdell accounts made by the 2001 tax legislation will expire on December 31, 2010, unless Congress acts before then to continue them. As such, please consult with our firm of Law Office of Scott C. Soady, A Professional Corporation for a updated status on this law. Also feel free to e mail our firm.