Author Topic: ESA (Education Savings Account) withdrawal question  (Read 157 times)

CoffeeR

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ESA (Education Savings Account) withdrawal question
« on: April 16, 2019, 10:21:25 AM »
If someone knows the answer to this, I'd appreciate it. I am looking at IRS Pub 970, but have not yet found the answer.

Can I withdraw money from a ESA account this year and treat it as a "Qualified Education Expense" for expenses occurred last year? I would have documentations/receipts. In other words, I did not withdraw last year as much as I could have to cover valid education expenses.

« Last Edit: April 16, 2019, 11:34:47 AM by CoffeeR »

walkwalkwalk

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Re: ESA (Education Savings Account) withdrawal question
« Reply #1 on: April 16, 2019, 11:29:19 AM »
Are you going to have any more qualified education expenses in 2019? Such as books, lab fees, etc.


Also do you know how much earnings would be attributable to the distribution? If its a low amount then maybe it doesn't matter too much? What does the rest of your tax situation look like?


CoffeeR

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Re: ESA (Education Savings Account) withdrawal question
« Reply #2 on: April 16, 2019, 11:34:33 AM »
Are you going to have any more qualified education expenses in 2019? Such as books, lab fees, etc.
Yes, but for a variety of reason I would like to deplete the ESA count sooner rather then later. I have other funds to cover education expenses. I will withdraw as much as I can in 2019 to cover 2019 expenses. Question is if I can withdraw in 2019 to cover expenses that occurred in 2018?

Also do you know how much earnings would be attributable to the distribution?
I am not sure why "earnings would be attributable to the distribution" matters since all ESA contribution were pre-tax. I am not disputing this, I wish to understand.

walkwalkwalk

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Re: ESA (Education Savings Account) withdrawal question
« Reply #3 on: April 16, 2019, 12:07:49 PM »
Also do you know how much earnings would be attributable to the distribution?
I am not sure why "earnings would be attributable to the distribution" matters since all ESA contribution were pre-tax. I am not disputing this, I wish to understand.
Earnings are what are taxed if not attributable to qualified education expenses in the year you distribute. Original contributions are not taxed, as they are considered your basis.

CoffeeR

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Re: ESA (Education Savings Account) withdrawal question
« Reply #4 on: April 16, 2019, 02:07:39 PM »
Also do you know how much earnings would be attributable to the distribution?
I am not sure why "earnings would be attributable to the distribution" matters since all ESA contribution were pre-tax. I am not disputing this, I wish to understand.
Earnings are what are taxed if not attributable to qualified education expenses in the year you distribute. Original contributions are not taxed, as they are considered your basis.
Darn (in a good way), you are correct. I had not contributed to the ESA for so long I did not realize only the earnings are taxed. I need to do check my records to see what my basis is.