Bureaucrats, Administrators, vuser
40,393
edits
Changes
MyWikiBiz, Author Your Legacy — Sunday December 01, 2024
Jump to navigationJump to searchTT-2008-59: Coverdell Education Savings Accounts
For more information see Publication 526, Charitable Contributions, Publication 561, Determining the Value of Donated Property, and Publication 4303, A Donor’s Guide to Car Donations, available on [http://irs.gov/ IRS.gov] or by calling 800-TAX-FORM (800-829-3676).
For more information see Publication 526, Charitable Contributions, Publication 561, Determining the Value of Donated Property, and Publication 4303, A Donor’s Guide to Car Donations, available on [http://irs.gov/ IRS.gov] or by calling 800-TAX-FORM (800-829-3676).
== TT-2008-59: COVERDELL EDUCATION SAVINGS ACCOUNTS ==
A Coverdell Education Savings Account (ESA) is an account created as an incentive to help parents and students save for education expenses.
The total contributions for the beneficiary of this account cannot be more than $2,000 in any year, no matter how many accounts have been established. A beneficiary is someone who is under age 18 or is a special needs beneficiary.
Contributions to a Coverdell ESA are not deductible, but amounts deposited in the account grow tax free until distributed. The beneficiary will not owe tax on the distributions if they are less than a beneficiary’s qualified education expenses at an eligible institution. This benefit applies to qualified higher education expenses as well as to qualified elementary and secondary education expenses.
Here are some things to remember about Distributions from Coverdell Accounts:
* Distributions are tax-free as long as they are used for qualified education expenses, such as tuition and fees, required books, supplies and equipment and qualified expenses for room and board.
* There is no tax on distributions if they are for enrollment or attendance at an eligible educational institution. This includes any public, private or religious school that provides elementary or secondary education as determined under state law. Eligible institutions also include any college, university, vocational school or other postsecondary educational institution eligible to participate in a student aid program administered by the Department of Education. Virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions are eligible.
* The Hope and lifetime learning credits can be claimed in the same year the beneficiary takes a tax-free distribution from a Coverdell ESA, as long as the same expenses are not used for both benefits.
* If the distribution exceeds qualified education expenses, a portion will be taxable to the beneficiary and will usually be subject to an additional 10% tax. Exceptions to the additional 10% tax include the death or disability of the beneficiary or if the beneficiary receives a qualified scholarship.
There are contribution limits for taxpayers based on the contributor’s Modified Adjusted Gross Income. Contributions to a Coverdell ESA may be made until the due date of the contributor’s return, without extensions.
If there is a balance in the Coverdell ESA when the beneficiary reaches age 30, it must generally be distributed within 30 days. The portion representing earnings on the account will be taxable and subject to the additional 10% tax. The beneficiary may avoid these taxes by rolling over the full balance to another Coverdell ESA for another family member. For more details, see IRS Publication 970, Tax Benefits for Higher Education (at IRS.gov) or call 800-TAX-FORM (800-829-3676).
== TT-2008-60: HOW TO CHECK ON YOUR TAX REFUND ==
If you already filed your federal tax return and are due a refund, you have several options for checking on the status of your refund.
One way is to use "''Where’s My Refund''?" an interactive tool on the IRS Web site at [http://irs.gov/ IRS.gov]. Simple online instructions guide taxpayers through a process that checks the status of their refund after they provide identifying information shown on their tax return. Once the information is processed, you could get several responses, including:
* Acknowledgement that your return was received and is in processing.
* The mailing date or direct deposit date of your refund.
* Notice that the IRS could not deliver your refund due to an incorrect address. In this instance, you can change or correct your address online.
''Where’s My Refund''? is a very flexible tool. Whether you split your refund among several accounts, opt for direct deposit into one account, or ask IRS to mail you a check, ''Where’s My Refund''? gives you online access to your refund information.
''Where’s My Refund''? also include links to customized information based on the taxpayer’s specific situation. The links guide taxpayers through the steps they need to take to resolve any issues that may be affecting their refund. For example, if you do not get the refund within 28 days from the original IRS mailing date shown on ''Where’s My Refund''?, you can start a refund trace online.
The "''Where’s My Refund''?" service meets stringent IRS security and privacy certifications. Taxpayers enter identifying information that includes their Social Security number, filing status and the exact amount of the refund shown on the return. This specific information verifies that the person is authorized to access that account.
"''Where’s My Refund''?" is accessible to visually impaired taxpayers who use the Job Access with Speech screen reader used with a Braille display and is compatible with different JAWS modes.
Another option for checking the status of your refund is by calling the IRS TeleTax System at 800-829-4477 or the IRS Refund Hotline at 800-829-1954. When calling, you must provide the first Social Security number shown on the return, your filing status and the amount of the refund. If the IRS processed your return, the system will tell you the date your refund will be sent. The TeleTax refund information is updated each weekend. If you do not get a date for your refund, please wait until the next week before calling back.
* [http://www.irs.gov/individuals/article/0,,id=96596,00.html Where’s My Refund?]
== External Links ==
== External Links ==
