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Posted: 6:00 a.m. Tuesday, April 2, 2013

Coverdell accounts offer way to pay for private school


School safety, funding, weapons on agenda in Legislature photo
Johnny Crawford,
Fifth-graders Maggie Graham, Jake Hodgson and Christian Lee (from left) rehearse “The Pirates of Penzance Jr.” at Holy Innocents’ Episcopal School. One legislator wants to double the private school tuition tax credit program.

You may have heard of 529 accounts, but Coverdell accounts offer a little known way to save for your child's private school.

With a Coverdell, you pop money in that grows tax-free and is spent tax-free on educational expenses for kids in kindergarten through 12th grade. You can contribute up to $2,000 a year once your child is born.

Coverdell money can also be used to pay for college tax-free instead of private school.

Charles Schwab is particularly big in the field of Coverdells. You need $1,000 to open an account and it comes with very low-cost investment fees.