Similar to a 529 plan, investments in a Coverdell ESA grow on a tax-deferred basis and can be withdrawn tax-free to pay for qualified education expenses for a designated beneficiary. However, one of the biggest differences between a Coverdell ESA and a 529 plan is the available investment options.

If a 529 plan account owner dies before the beneficiary enters college, will the account be subject to state estate tax or state inheritance tax? In most cases, the answer is no. Each state has its own rules regarding taxes paid by heirs and estates. An inheritor of a 529 plan account may owe inheritance tax, depending on their relationship to the deceased and the account value.

The Tuition and Fees Deduction expired in 2017, but expiration date has been extended to December 31, 2020. Eligible taxpayers may claim the Tuition and Fees Deduction for tax years 2019 and 2020 and they may also claim the deduction retroactively for tax year 2018.

A score of Democratic and Republican candidates for U.S. President have taken positions concerning college affordability and student loans. The details of their proposals may help differentiate among the candidates.