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Meaning / Definition of

Education Savings Account (ESA)

Categories: Finance,

You can put up to $2,000 a year into a coverdell education savings account (ESA) that you establish in the name of a minor child. The assets in the account can be invested any way you choose.There is no limit on the number of accounts you can set up for different beneficiaries, but no more than a total of $2,000 can be contributed in a single beneficiary's name in any one year. If you choose, you may switch the beneficiary of an ESA to another member of the same extended family.Your contribution is not tax deductible. But any earnings that accumulate in the account can be withdrawn tax free if they're used to pay qualified educational expenses for the beneficiary until he or she reaches age 30. The costs can be incurred at any level, from elementary school through a graduate degree, or at a qualified post-secondary technical or vocational school. There are no restrictions on using ESA money in the same year the student uses other tax-free savings, or the student, parent, or guardian uses tax credits for educational expenses. But you can't take a credit for expenses you covered with tax-free withdrawals.To qualify to make a full $2,000 contribution to an ESA, your modified adjusted gross income (MAGI) must be $95,000 or less, and your right to make any contribution at all is phased out if your MAGI is $110,000 if you're a single taxpayer. The comparable range if you're married and file a joint return is $190,000, phased out at $220,000.

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Hand

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nounthe part of the body at the end of each armUsageto shake handsto hold someone's hand when meeting to show you are pleased to meet them, or to show that an agreement has been reached ExampleThe two negotiating teams shook hands and sat down at the conference table.Usageto shake hands on a dealto shake hands to show that a deal has been agreedUsageby handusing the hands, not a machine ExampleThese shoes are made by hand.Usageto send a letter by handto ask someone to carry and deliver a letter personally, not sending it through the postUsagein handkept in reserve Examplewe have £10,000 in handUsagebalance in handcash in handcash held to pay small debts and running costsUsagework in handwork which is in progress but not finishedUsagegoods left on handunsold goods left with the retailer or manufacturer ExampleThey were left with half the stock on their hands.Usageto handhere or presentUsageI have the invoice to handI have the invoice in front of meUsageto change handsto be sold to a new owner ExampleThe shop changed hands for £100,000.Usagein witness whereof, I set my handI sign as a witness

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