Do you have children who are thinking about withdrawing money from their traditional IRAs or savings to pay for college?
Then stop them before they face stiff penalties!
The culprit is the infamous “kiddie tax” that applies to all full-time students under twenty-four years of age. (That’s right. The IRS considers your twenty-three year old to be a “kiddie.”)
Want to learn how your children can avoid losing money they’ve saved to pay for their higher education?
We’ll explain three money-saving strategies you and they should know about when you read my new article titled Tax Tips: Q&A: Traditional IRA Eliminates Kiddie Tax Here, But…
Three strategies you can use
to beat the kiddie tax.
Strategy #1: For Roth IRA withdrawals. We’ll explain in detail the three steps your son or daughter needs to take, starting with socking away money at an early age. We’ll have a complete plan for you when you read the full article.
Strategy #2: For traditional IRA withdrawals. When it comes to paying for college expenses, a traditional IRA doesn’t work as well as a Roth IRA. However, there are things you can do to save money when it’s taken out of a traditional IRA for educational purposes. All will be explained when you read the full article.
Strategy #3: Investments and savings accounts. An under twenty-year-old college student may not want investments, interest, or dividends while attending college for two reasons that we’ll explain. If that’s the case, the youngster should consider capital investments that appreciate but don’t produce annual taxable income. We’ll tell you when this strategy makes sense when you read the full article.