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Author: tomatogrwr One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: Educational IRAs? Date: 12/29/1999 11:52 PM
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Does one have to fund an educational ira before the end of the year?
If both parents earn income is it just $500/child for both parents or $1,ooo/child for both parents ?

Can the ed ira be done in addition to the Roth IRA?

When you set up an ira is it best to have the Fed,and State taxes taken out by Waterhouse,or do it yourself?

Thanks :)
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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17091 of 76418
Subject: Re: Educational IRAs? Date: 12/30/1999 8:01 AM
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Greetings, Tomatogrwr, and welcome. You asked:

<<Does one have to fund an educational ira before the end of the year? >>

Yes, the contributions for an EIRA must be made by 12/31 for each year.

<<If both parents earn income is it just $500/child for both parents or $1,ooo/child for both parents ?>>

It's neither. A maximum of $500 from all contributors combined is allowed for each child. Thus, one person may contribute $500 or 500 persons may contribute $1 to the child's EIRA, but they cannot contribute $500 each.

<<Can the ed ira be done in addition to the Roth IRA?>>

Yes it can.

<<When you set up an ira is it best to have the Fed,and State taxes taken out by Waterhouse,or do it yourself?>>

Taxes pertain only to distributions from an IRA. While funds stay inside that IRA, there are no taxes to worry about. On distribution, the custodian may make a withholding for income taxes should you so desire.

For details on IRAs, see our IRA area at http://www.fool.com/Money/AllAboutIRAs/AllAboutIRAs.htm.

Regards..Pixy

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Author: Bob78164 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17120 of 76418
Subject: Re: Educational IRAs? Date: 12/30/1999 5:17 PM
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tomatogrwr writes:

Does one have to fund an educational ira before the end of the year? If both parents earn income is it just $500/child for both parents or $1,ooo/child for both parents?

Can the ed ira be done in addition to the Roth IRA?

When you set up an ira is it best to have the Fed,and State taxes taken out by Waterhouse,or do it yourself?


I reply:

The Education IRA, unlike the traditional or Roth IRA, must be funded before December 31. The $500 limit is measured on a per child basis, not a per contributor basis; in other words, each child may receive contributions of only $500 per year from all sources combined. One may contribute money to an Education IRA as well as to a Roth IRA, provided the eligibility limits for each type of account are satisfied.

I don't understand the final question. Taxes are not taken out when the account is set up. The whole point of using an IRA is to achieve growth without paying interim taxes. If I've misunderstood your last question (and no one else answers it), please post again. --Bob

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