use the kitty tax rule to save money for the child's future???
for those who do not know what it is -- take a set amount of money and you acting as trustee set up an account like a cd where by the minor earns up to 800 dollars in interest in there name under their ss number and the unearned income is not taxed -- you than can take the interest and invest in savings bonds in their name and they do not have to pay takes until they cash the bonds!!
2007-12-06 02:04:34 · 9 answers · asked by Anonymous in Society & Culture ➔ Cultures & Groups ➔ Senior Citizens
the irs allows minors to earn up to 800 dollars in unearned income tax with out effecting them or their parents taxes!! in other words the minor does not have to declare the tax
2007-12-06 02:45:17 · update #1
In Answer to your question... I'm just not sure.
Good information for a lot of folks!
Thank You ...
Merry Christmas!
2007-12-06 03:02:14 · answer #1 · answered by Anonymous · 0⤊ 0⤋
If that is $800 a year - that would not put much of a dent into most peoples tax bill. And if the child was say "7" - it would take too long to accumulate much money to go to college at just $800.00 - unless of course, more can be tax free or added to the account.
Not many people I know could afford to do that !!!!!!!!! CJ
2007-12-06 15:00:10 · answer #2 · answered by CJ 6 · 0⤊ 0⤋
I have to admit I am totally inept in this field. My eyes glaze over and my mind goes numb. I have something going for them now but not sure what it is. The estate planner is doing it for me and I'm not sure if it's the best thing either. I just know raising them I was lucky I could make basic ends meet ..... forget saving. Heck I didn't even have a checking account for awhile because I needed every red cent I made and couldn't afford the bank fees. I'll have to ask about this option though.....thanks.
2007-12-06 06:17:11 · answer #3 · answered by Anonymous · 0⤊ 0⤋
I have no idea but I'm watching each and every monent to see the answers. Is it really called "The Kitty Tax Rule?"
:) Juju
2007-12-06 02:15:56 · answer #4 · answered by Ju ju 6 · 1⤊ 0⤋
Wonderful idea, I however invest in kitty litter and pay the 7.5% tax in my state! LOL
2007-12-06 03:58:06 · answer #5 · answered by slk29406 6 · 0⤊ 0⤋
I never heard of that, but there is something similar. My kids both have a Roth set up.
2007-12-06 02:41:54 · answer #6 · answered by noonecanne 7 · 1⤊ 0⤋
Never heard of such a thing. Would love more information.
2007-12-06 02:31:49 · answer #7 · answered by Aloha_Ann 7 · 1⤊ 0⤋
Mr. Ed, you should run for Prez, you'd have my vote!!
2007-12-06 02:27:33 · answer #8 · answered by ndnquah 6 · 2⤊ 0⤋
Hard to say.
2007-12-06 02:11:11 · answer #9 · answered by WooleyBooley again 7 · 1⤊ 0⤋