Enhance Your Education Savings Plan Tax-advantaged accounts are an attractive means to save money for the future. An Individual Retirement Account (IRA), for instance, allows investors to save money for retirement. The Education Savings Account is designed for another important savings goal: education. Benefits | At A Glance | How to Open | Choosing a Fund | Invest Online Benefits of an Education Savings Account • Important tax advantages. Investments in an Education Savings Account can grow tax-free. • Flexibility with contributions. You control where investments are directed. It's perfect for relatives, grandparents, or anyone who wishes to give the gift of education. • Controlled by an adult. A parent or guardian maintains control over the account until the beneficiary (child) reaches age 30. The account is registered in a child's name with a parent or legal guardian named as the account's responsible individual. The responsible individual controls the Account until all assets are withdrawn or the student attains the age of majority under state law. Education Savings Account At a Glance Minimum to open $500 per Fund account Contribution deadline April 15 (tax filing deadline, not including extensions) Annual contribution limit $2,000 per beneficiary, per year until the beneficiary's 18th birthday, subject to restrictions. Beneficiary eligibility Beneficiary must be a minor (under age 18) when account is opened. Contributor eligibility Any individual (including the designated beneficiary) can contribute if his/her modified adjusted gross income (MAGI) is below the income limits. Organizations, such as corporations and trusts, can also contribute. There is no requirement that an organization's income be below a certain level. Contributor income limits The income maximum for joint-filers is $220,000 ($110,000 for single-filers). Phase-out range for married taxpayers filing jointly is $190,000 to $220,000 of modified adjusted gross income ($95,000 to $110,000 for single-filers). Deductibility Contributions are not tax deductible. Earnings Tax-free if withdrawn for qualified educational expenses before the child is age 30. Using the Assets Withdrawals are federally tax-free and penalty free as long as they are used for qualifying education expenses -- such as tuition, books, fees, and supplies -- for elementary, secondary, or higher education. Students enrolled half-time or more may also make tax-free withdrawals to pay for room and board. Possible Penalties on Withdrawals Withdrawal of earnings for non-qualified education expenses may be subject to a 10% penalty and are considered taxable income. Excess contributions (those over the maximum of $2,000 per beneficiary, per year) are subject to a 6% additional tax for each year that the excess remains in the account. If there are any unused funds in the account when the beneficiary reaches age 30, these funds must be distributed to him or her as a taxable withdrawal. However, rolling these funds over to a qualified family member of the designated beneficiary can preserve the tax-free status of the funds. Fees One-time set up fee per Fund account: $5 Annual maintenance fee per Fund account: $7 (maximum of $14 per Social Security Number)   How to open an Education Savings Account Learn more about the Education Savings Account. Access the Education Savings application. Invest online: open a NEW Education Savings Account right away. Which Oakmark fund is right for your Education Savings Account? Find out more about The Oakmark Funds. View recent Fund performance. Please consult your tax advisor with information specific to your situation.