meierlde
Thinks s/he gets paid by the post
I just noticed that the tax on unearned income of children has gone way up, it now uses the trust and estate tax rate schedule that tops out at 12,500, no longer at the top rate of the parents. So the tax law now makes giving money directly to a child that would result in unearned income above 2100, a huge increase in the tax burden. with unearned income above 12,500 being taxed at 37 percent. https://www.bogleheads.org/wiki/Kiddie_tax
This makes giving significant money to minors much more expensive all be it starting with 52 k total at a 4% return. It does look like low tax index funds are the way to go here also. Note this tax applies to students till age 24, which implies 529s might be a better way to go. So assuming a 4% rate of return that looks like about principal above 312k , 156k at 8%
This makes giving significant money to minors much more expensive all be it starting with 52 k total at a 4% return. It does look like low tax index funds are the way to go here also. Note this tax applies to students till age 24, which implies 529s might be a better way to go. So assuming a 4% rate of return that looks like about principal above 312k , 156k at 8%
Last edited: