Coverdell Education Savings Account (ESA): allows any individual to contribute a maximum of $2,000 a year for the benefit of any person under age 18.

The contribution limit is phased out for contributors with a modified adjusted gross income between $95,000 and $110,000 for single persons and between $190,000 and $220,000 for joint filers. The phase-out is ratable: i.e., if you're single and your income is halfway between $95,000 and $110,000, then you can contribute $1,000 -- half of the maximum.

Individuals have until the due date of their tax return (not including extensions) to make a contribution and still have it apply to the previous year.

Funds must be used by the time the beneficiary turns 30 years of age. However, the account may be transferred to a relative (including cousins, step-relatives, and in-laws). If funds are used for a nonqualified expense, earnings will be assessed a 10% penalty and will count as ordinary income to the beneficiary. 

Contact your Credit Union IRA Specialist at *cwagner@atlanticregional.com for more information, specific plan details, and limitations or call (207) 725-8728.

*Electronic mail is not secure, and confidential or personal information should not be communicated in this manner.