How to Take Funds From a Coverdell Education Savings Account

Coverdell education savings accounts (ESAs) offer tax-sheltered growth and tax-free qualified distribution to help families save for future education expenses. Coverdell ESAs have lower contribution limits than qualified tuition plans (QTPs)-- you can only contribute $2,000 per year as of 2013 -- but qualified expenses include both lower school and post-secondary education costs, whereas QTPs are limited to post-secondary schools. When it comes time to make a withdrawal, you don't have to worry about any tax reporting as long as the money gets used for qualified expenses.

Complete a Coverdell ESA distribution request form from the financial institution that holds the Coverdell ESA. These forms generally require the beneficiary's name and address, the custodian's name and address, how much you want to withdraw and how you want the money paid to you.

Submit the withdrawal request to the financial institution. When it is processed, you will receive the funds in the manner you specified.

Spend the proceeds on qualified education costs to avoid taxation. Qualified costs for Coverdell ESAs include tuition, fees and supplies for elementary school, high school, college, trade school and graduate school. It also includes room and board for post-secondary education if the student is enrolled at least half-time. As long as you spend the money on qualified expenses, it doesn't need to be reported on any tax returns.