Education Savings Accounts

What this video covers

• The Coverdell ESA aggregate contribution limit of $2,000 per beneficiary per year, and why this is shared across all contributors rather than per contributor
• Modified Adjusted Gross Income (MAGI) phase-out ranges for Coverdell contributors: single filers at $95,000-$110,000 and married filing jointly (MFJ) at $190,000-$220,000
• Why Coverdell contributions must stop at age 18 and funds must be used by age 30, with exceptions for special-needs beneficiaries
• How 529 plans differ from Coverdells: no federal contribution limit, no contributor income limits, and no age cutoff for contributions
• 5-year gift tax averaging for 529 plans: front-loading up to $95,000 ($190,000 MFJ) and treating it as spread over five years
• Which expenses qualify for K-12 versus higher education under 529 rules, and why K-12 room and board is specifically excluded
• The three strict requirements for 529-to-Roth IRA rollovers: 15-year account age, 5-year contribution seasoning, and $35,000 lifetime cap; plus why the annual Roth IRA contribution limit applies but MAGI phase-outs do not