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Forum
-> Household Management
-> Finances
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amother
OP
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 Tue, Feb 23 2021, 5:15 pm
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Can you please let me know what type of tax-free accounts you’ve set up to hold your children’s investments? We’d like to make a modest investment in a mutual fund for our 16 year old daughter.
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zaq
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Tue, Feb 23 2021, 5:20 pm
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If it's not a lot of money, the account need not be tax-free because at least in the beginning your dd will not make enough to pay taxes on. When the income on the account is at the point at which she may have to pay taxes, you can liquidate and reinvest in a tax-free account. Even so, it may not necessarily be worth it if the tax-free account pays significantly less than a taxable account, because unless your dd will be making a LOT of money, the taxes on the revenue will likely be less than the difference in earnings between a taxable and tax-free investment.
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amother
OP
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Tue, Feb 23 2021, 5:43 pm
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That’s very helpful. Thank you!
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amother
Oak
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Tue, Feb 23 2021, 5:45 pm
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Other than 529 I didn’t realize there was such a thing as tax free investments for kids.
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jd1212
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Tue, Mar 02 2021, 7:26 am
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You have 529, coverdell, and whole life insurance cash value (financial planner/insurance advisor).
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