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Education Savings Account
The Janus Advantage
 

Kids do grow up fast, so the right investment strategy could help you keep up with the higher costs of higher education.

An Education Savings Account is a custodial account in which the child owns the money, but a parent or legal guardian manages the account. Earnings within the account grow tax-deferred and are distributed tax-free when they are withdrawn exclusively to pay the child's education expenses.



Is an Education Savings Account right for you?

  • Are you interested in creating an account that serves exclusively to pay for a child's education expenses?
  • Are you interested in an investment that provides tax-deferral and tax-free withdrawals, but is not tax deductible now?
  • Are you the parent, relative or friend of a child under the age of 18 with a Social Security Number?

Eligibility

  • An account can be opened by a parent, relative or friend on behalf of any child under the age of 18 with a Social Security Number.
  • The responsible individual listed on the account must be the parent or legal guardian.

Tax features

  • Your earnings grow tax-deferred.
  • Withdrawals are free from federal income taxes when used for qualified education expenses.

Note: Contributions to an Education Savings Account are not tax-deductible.

Contribution limits

  • The maximum annual contribution is $2,000 per student, per year until the child's 18th birthday.
  • Your adjusted gross income may limit your contribution amount as detailed in the contribution limit chart.

Investment minimums

  • The minimum investment to open an Education Savings Account at Janus is $500 with subsequent investments of $50 or more per month through an Automatic Investment Program (AIP). The minimum investment is $1,000 without an AIP.
  • The minimum additional investment to an existing account is $100.

Making withdrawals

  • Withdrawals are tax-free when used to pay for qualified education expenses.
  • Nonqualified withdrawals are taxable and may result in a 10% penalty on earnings.
  • Qualified withdrawals may be made for elementary and secondary schooling as well as for college education.

Useful Information

  • Assets accumulated in an Education Savings Account may affect a student's ability to qualify for financial aid, or limit the availability of certain tax credits. It is good idea to talk to a tax adviser before establishing this type of account.
  • Review the  Janus Coverdell Education Savings Account Disclosure Statement and Custodial Agreement for complete Education Savings Account details.
  • More details on contributions, eligibility, and tax benefits for education, may be found in Publication 970 on www.irs.gov.

 

 

Look inside. The Janus Way

Tomoko Kotaka

Research Associate

 

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Please consider the charges, risks, expenses and investment objectives carefully before investing. Please see a prospectus , or if available, a summary prospectus containing this and other information. Read it carefully before you invest or send money.

Janus funds are offered only to US Citizens (or US Resident Aliens) residing in the United States or a US Territory, and the information on this Web site is intended only for such persons. Nothing on this Web site should be considered a solicitation to buy or an offer to sell shares of any Janus fund in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction.

If you're a non-US citizen or resident, please see the non-U.S. funds section of our site.

An Education Savings Account should be considered a long-term investment. Education Savings Accounts generally have expenses and account fees, which may impact the value of the account. Non-qualified withdrawals may be subject to taxes and penalties. For more detailed information about taxes, consult your tax attorney or accountant for advice.

Tax information contained herein is not intended or written to be used, and it cannot be used by taxpayers for the purposes of avoiding penalties that may be imposed on taxpayers. Such tax information and any estate planning information is general in nature, is provided for informational and educational purposes only, and should not be construed as legal or tax advice.

Janus Distributors LLC