In this episode, Dr. Friday shares a tax-savvy way for parents to help their working teens save for the future. Learn how contributing to a traditional or Roth IRA can provide long-term financial benefits and tax advantages.
Transcript:
G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.
I want to put the caveat first that I am not a financial planner. I look for ways to save tax dollars. But one way is, let’s say you have a 15-year-old child that’s doing babysitting or working, and maybe they even work for your company as a partner in a partnership or sole proprietorship, and they’re making that $7,000 to $10,000.
One thing they could do is open up a traditional IRA, and that $7,000 would be tax-deferred, or $8,000. And then the other side of that would be, let’s say they put it into a Roth. They would defer all of that growth for the next, what, 60 years? That sounds like a wonderful tax plan for your kids.
You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.