Education Savings Accounts
Chapters in this video
- 0:00 Coverdell ESA as the $2,000 teacup
- 1:57 The tax-deduction trap and age-30 deadline
- 2:50 529 plan as the giant vault: no limits
- 3:27 Gift tax dragon and five-year averaging
- 4:22 Non-qualified withdrawal: earnings only
- 5:17 Beneficiary changes and family member definition
- 5:46 SECURE 2.0 three-lock escape hatch
- 7:37 Rapid-fire exam recap
What this video covers
- Why Coverdell ESA contributions are capped at $2,000 per beneficiary per year, and how that limit stacks up against 529 plans
- The difference between tax-deductible contributions and tax-free growth, and which benefit actually applies to education savings accounts
- How the Coverdell ESA age-30 deadline and contributor income phase-outs create exam traps
- Why 529 plans have no federal contribution limit but still trigger gift tax reporting above $19,000 per year per beneficiary
- How five-year gift tax averaging works to front-load up to $95,000 into a 529 without gift tax consequences
- The tax and penalty treatment of non-qualified 529 withdrawals, and why only earnings are hit, never principal
- The three SECURE 2.0 requirements for a 529-to-Roth IRA rollover, and how missing even one disqualifies the entire transfer
Read the full lesson, free
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