Self-directed education savings account
Are you interested in creating a potentially tax-free educational savings account while having the ability to self-direct those funds into alternative investments? With Self-Directed Coverdell Education Savings Account (ESA) from Preferred Trust, you may save for your child's education and the earnings are potentially tax free. In addition, you may also self-direct those funds into non-traditional investments, such as real estate, notes, partnerships and more.
Contributions to an Preferred Trust Self-Directed Coverdell ESA are not tax deductible, however the earnings are tax free, assuming the contribution is less than the account holder's annual adjusted qualified education expenses. In the event that the distributions are higher than the expenses, the gains are taxed at the account holder's rate rather than the contributor's rate (which is typically higher). Contributions are discretionary, which means that you are not required to make deposits every year.
A Preferred Trust Self-Directed Coverdell Education Savings Account is for you if:
- You have dependents that will eventually attend an educational institution, whether elementary, secondary, public, private or religious.
- You are looking for the savings to grow tax deferred or tax free.
- You are seeking an investment vehicle that can be used for a number of educational expenses, such as uniforms, computers, and transportation for school.
Coverdell Education Savings Account Contribution Limits: $2,000 per year until the child is age 18, unless the child has special needs. (See Internal Revenue Service Publication 970 for more information.)
