1. Education Savings Account: Introduction
  2. Education Savings Account: Qualifying To Contribute
  3. Education Savings Account: Opening An ESA
  4. Education Savings Account: Avoiding Taxes On Distributions
  5. Education Savings Account: Conclusion

By Reyna Gobel


  • Anyone can contribute to an ESA on behalf of a child.
  • ESAs must be started and funded before age 18, but after a child is born.
  • Co-ordinate with other contributors as much as possible so you don't accidentally cause your son or daughter to pay taxes.
  • The maximum contribution is calculated two ways: maximum contribution per individual and maximum per child.
  • You can't contribute to an ESA if your modified adjusted gross income is above $110,000 as a single person or $220,000 as a married couple. Contributions are calculated on a sliding scale for individuals with MAGIs above $95,000 and below $110,000. Married couples contribute on a sliding scale if their combined MAGI is above $190,000 and below $220,000.
  • Contributing to an ESA isn't the only way to save for your child's education. Also consider 529 plans. Contributions aren't based on income and can be larger amounts.
For further reading, check out How Expanded Kiddie Tax Affects Families, How And When To Switch Your 529 Plan, Filing Your Child's First Income Tax Return and our Student Loans Tutorial.

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