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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: Elroy who wrote (3885)	2/23/2010 8:51:04 PM
From: chowder	Respond to of 34328

You can open a custodian account. Your name goes on the account along with the child. You have control over the account until 18, I think. After that, it's their money. You can still make changes, but the account is their's to do what they want. My son is 25 and I still manage his custodian account. If he decides to cash it in though, I don't have control over that anymore. Of course he'd have to have an account number and a password. Good luck with that. (hehehe) I'm not sure about taxes. I think they have to generate a certain amount of money before they file taxes. My CPA keeps up with that. You may want to see what the earnings threshold is.

To: Elroy who wrote (3885)	2/23/2010 9:09:09 PM
From: Steve Felix	Read Replies (2) \| Respond to of 34328

Income threshold You don't have to worry about this rule until your child has investment income greater than a threshold amount, which is two times the amount allowed as a standard deduction for a dependent who has only investment income. For 2009, that amount is $950, so the kiddie tax begins to apply when your child has more than $1,900 in investment income. Your child can still owe regular income tax with less than $1,900 in income. This is merely the threshold amount of investment income for the special kiddie tax. _____________________________________________________________ A year old though fairmark.com _____________________________________________________________ It would take $38,000 at 5% yield to hit that amount, not counting capitol gains though if you are trading. Someone may pipe in with a better way to save for a child, but there would be benefits if you can afford it, imho. Say your son gets a summer job at fourteen and makes 3k. He's not going to want to hand it over, he's going to have things he wants. You could take 3k of what you have saved and move it into a Roth for him, giving him the full 3k deduction = 0 taxes for him. Or teach him to put back a certain percentage and cover the rest. From a first job until full time employment would be a great teaching experience.