|Question: Can I make contributions to a 529 account and a Coverdell education savings account in the same year for the same beneficiary?|
Yes. You can fund a Coverdell education savings account and a 529 account in the same year for the same beneficiary without giving rise to penalties. There is an annual contribution limit of $2,000 per year for Coverdell accounts, while most 529 plans have lifetime contribution limits of at least $300,000.
And keep in mind that, unlike a 529 plan, your ability to contribute to a Coverdell ESA depends on your income level. To make a full contribution, single filers must have a modified adjusted gross income (MAGI) of $95,000 or less, and joint filers must have a MAGI of $190,000 or less.
Note: Investors should consider the investment objectives, risks, charges, and expenses associated with 529 plans before investing. More information about 529 plans is available in each issuer's official statement, which should be read carefully before investing. Also, before investing, consider whether your state offers a 529 plan that provides residents with favorable state tax benefits.