However, this should be done under a parent’s guidance. Taking care of one’s own college education expenses does not always mean that the kid has to end up working in burger joints. There are other smarter ways of doing it also. If a teenager can spend a couple of hours everyday learning about the stock market and the trends, they can actually make a worthwhile income for their college tuition. When they want to withdraw, the parents can always monitor it and also they can be withdrawn as education expenses which are tax free.
In order to set up your teenage son or daughter for trading in the stock exchange, they should have a custodial account that has been set by an adult. The teenager’s Social Security number is enrolled, and it is listed under the parent’s name. Custodial accounts are approved under the Uniform Gift to Minors Act, and they are legal. This account can be used by the teenager to trade in stock markets. However, these accounts are not exactly tax deferred. When the money is drawn from the account for the purpose of education, then it becomes tax free. Also, the parent’s authorization is required while withdrawing the money.
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