Tax Tip: The Yeshiva Tax Break

Annual contributions to Coverdell education savings accounts (ESAs, formerly known as The Education IRA) are $2,000 per beneficiary for 2002, and are taken off your taxes. Contributions can be made up to April 15, 2003.

Why use an ESA to save? The contributions are now available to cover qualified education expenses — kindergarten through grade 12. Qualified education expenses can even include the cost of a computer, if it’s used for education!

This full contribution limit is for joint filers whose adjusted gross income (AGI) is less than $190,000 ($95,000 for single filers). Partial deductions phases out for joint filers with AGI above $220,000 ($110,00 for single filers).

E. David Yankovich, CPA

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