I understand the tax law changed this year to allow expanded educational savings accounts. Someone told me these accounts could be used to pay for private elementary school tuition.

As with any tax law, the rules are complicated so for the best answer to your own situation, please contact a financial planner or tax accountant. Here’s what I was able to find out from some basic library and Internet research.

New provisions of the educational saving account law became effective Jan. 1. The two major changes are an increase in the contribution limit from $500 to $2,000 and allowing educational expenses for K-12 instead of just college. Here is a summary:

The Coverdell Education Savings Accounts (ESAs) allow parents (or grandparents, unrelated adults or even corporations and nonprofits) to place as much as $2,000 per year, per child, in a designated savings account. This amount has been increased from $500.

These after-tax dollars earn interest at a tax-free rate. Neither the principal nor the interest is taxable upon withdrawal if used for a qualified educational expense.

Families with children in public school can use the ESA to pay for many of the extras that public schools cannot afford, such as home computers, school supplies, school uniforms and after-school programs.

ESA dollars can be used to pay for the tutoring services of public school teachers, supplementing their income.

ESA dollars can also be used for private or religious school. Allowable expenses include room and board and transportation.

Who is eligible to make contributions to an ESA?

Individual taxpayers with modified adjusted gross incomes under $95,000 and married taxpayers filing a joint return with incomes under $190,000 may make the maximum allowable annual contribution.

To set up an education savings account, simply visit your local bank branch or financial planner. They should then walk you through the necessary processes and help answer your individual questions.

If you have a question or comment for “Sense for Seniors,” write to Betty Gibb, Kansas Senior Press Service, 11875 S. Sunset, Olathe 66061, or send e-mail to elizabeth.gibb@jocoks.com.