THE EDUCATION IRA

„h Contributions may be made for current year only.

„h /available to individuals with income to$95,000.00 and couples filing jointly with income to $150,000.00. (contributions are phased out between $95,000.00 and $110,000.00 for individuals, between $150,000.00 and $160,000.00 for joint filers, and between $0.00 and $10,000.00 for those married filing separately.)

„h Contributions limited to $500.00 per year per beneficiary, but this is in addition to the $2,000.00 limit for Roth and /or traditional IRAs.

„h Contributions may be withdrawn tax-free at any time.

„h Money may be withdrawn tax-free if used to pay for beneficiary’s post-secondary expenses before he or she reaches age 30.

„h Distributions used for any other purpose are taxable to the beneficiary in the same manner as distributions from a traditional IRA that has received nondeductible contributions.

„h Taxable distributions are subject to a 10% tax unless the beneficiary is deceased, disabled, or to the extent that a scholarship is received.