July 2, 2012
What parent isn’t concerned with their children’s future? And part of this concern relates to ensuring our children’s financial well-being. So, IRA’s for kids? Yes, really! The opportunity for retirement savings begins as soon as kids start to earn money, so why not begin educating them now on saving for their future?
IRA’s, whether traditional or Roth, are available to anyone, regardless of age, as soon as they have income from a job. For kids, this is anything from babysitting and lawn mowing to a position at McDonalds or within your small business. As long as the income is reported to the IRS on a W-2 and/or in the child’s tax return, the child is eligible for an IRA contribution. Even better, an unmarried dependent child’s standard deduction in 2012 shelters the first $5,950 of earned income from taxes. That means contributing to a Roth IRA is a slam dunk—offering completely tax-free growth and withdrawals for years to come. The only limitation is that kids can contribute the lesser of $5,000, the amount of their earned income for the year, or any amount up to the limitation.
Another perk of the Roth IRA is that it can be used as a vehicle for college savings, as contributions to a Roth IRA can be withdrawn penalty- and tax-free as long as the money is used for qualified college expenses; for example, tuition, books, equipment and fees. (Note: funds cannot be used for room and board.) Additionally, retirement plan assets are not included in most financial aid calculations, so if financial aid is required, IRA funds should not factor in.
For more information on how IRA’s for kids can offer tax benefits, please contact our firm. We are always here to help!
BOSS is the answer to your back office headaches. Our cloud-based solution enables you to hand complex accounting tasks over to us. We work the numbers while providing you 24/7 access to your data—and all at a fixed, affordable monthly fee.
Small business owners in many communities offer downtown trick or treat events. Take advantage of this opportunity to build your business reputation. Involvement in local events goes a long way with both existing and prospective customers—indicating a vested interest in your community. Find creative ways to make your business stand out this trick-or-treat season. We hope the following suggestions will spark fun promotional ideas:
October marks Women’s Small Business Month, and we are happy and proud to recognize women in business both locally and around the world. Successful business women of the past and present continue to forge new paths for female entrepreneurs. We celebrate all those who are breaking the glass ceiling and serving as role models and mentors to women everywhere.
For many business owners, September tends to bring a bit of a slowdown. The chaos of getting kids prepared for going back to school has passed, and a focus on saving money tends to kick in as people prepare for the coming holiday spend. Combined, this can often translate into a lull for business owners.