Estimated tax tip savings. Help your child set up the right kind of IRA once he or she begins working, and you could save that child $2 million in taxes at retirement (see example below).
Do you want to open an IRA account for your child that will convert a $55,000 investment into $7.3 million at retirement? Better yet, how would you like it if that growth came with a tax bill of zero dollars?
Believe it or not, this is possible, and you can make it happen for your child with an IRA. There’s only one catch—your child has to get a job. IRA contributions require “earned income,” which means money received as compensation for work (as opposed to dividends or interest).
As a business owner, you have the tools to put your child in this position. You can hire even very young children in your business, which creates tax savings for you and creates earned income for your children.
The secret weapon in this strategy is choosing the right kind of IRA for your child. In order for your child to have every chance of retiring as a millionaire, be sure to ... Log in to view full article.