Like an Individual Retirement Account (IRA), an Education Savings Account, known as an ESA, grows tax-free while you build your savings. And you can make tax-free withdrawals for qualified education expenses.

An ESA isn't just for college savings. You can also use ESA funds for elementary and secondary school expenses.

Other advantages include the flexibility to change beneficiaries to another family member at any time. This could come in handy if you're saving for one child's education but find out later that it would be more useful for someone else in your family.

Currently, you're allowed to contribute up to $2,000 per child a year to an ESA if your Adjusted Gross Income does not exceed $95,000 (single) or $190,000 (joint).* Also, there is no penalty if you want to transfer the funds from an ESA to a Qualified Tuition Program (QTP).

Is an Education Savings Account right for you? Contact your H&R Block Financial Advisor to help you open an account today.

Don't yet have an advisor? Visit our office locator to find an advisor near you, or call 1-866-295-7912.

Contact H&R Block Financial Advisors for a free financial review.

*Contribution limits will begin to phase out when Adjusted Gross Income exceeds $95,000 for single and $190,000 for married. Please talk to your financial advisor for more details.