Investment and Finance

Yes. The "Kiddie Tax" is applicable to children under 19 years . The "Kiddie Tax" is a tax on children with gross investment income of $2,000 or more. The calculation of the child's tax yields a higher tax calculation using the parents' higher tax rate when applicable.

You are permitted to roll your money over into an IRA, 401(k) or 403(b) when you retire or change jobs. This portability gives you more options and control over your money.

No. The cost of an investment seminar or financial planning seminar is not deductible. Convention expenses are only deductible if related to a business activity not an investment activity.

Yes. Children age 18 years or under with investment income of more than $1,900 must use Form 8615 to figure their income tax. Income over $2,000 is taxed at the parent's higher rates if applicable.
If certain criteria are met, the parents may elect to claim the child's income on their tax return using Form 8814.
Speak to your local CPA about the tax strategy of filing Form 8615 or Form 8814.

No. Anybody can be the beneficiary of your IRA(even your trusted local CPA). Unlike retirement plans sponsored by an employer, an individual can choose anyone he wishes to be the recipient of his IRA.

Unlike yourself who is entitled to roll over an IRA from your deceased spouse, your children must pay taxes on the IRA money they inherit. The trick is to stretch out the required minimum distributions from the deceased spouse's IRA since the IRA cannot be rolled over into your children's name. If your spouse died before 70 1/2, your children must take the money within five years or their own life expectancy. You should retain a CPA to determine the minimum distributions. If your spouse died after reaching 70 1/2, it is even more complicated. Speak to your local CPA.

No. You cannot contribute to a traditional IRA once you reach 70 1/2. The year in which you turn 70 1/2 is the tax year you cannot contribute to an IRA. For example if you turn 70 1/2 in the current year, you can still make a contribution by April 15, of the following year for the current year but cannot make any contributions for a traditional IRA related to the following tax year.

The required beginning date for distributions is usually April 1st of the year following the year you turned 70 1/2.

The Kiddie Tax refers to the tax parents pay for their dependent children under the age of 19, when the child is taxed at their parents' tax bracket.
The current tax law imposes the "Kiddie Tax" on a dependent child under 19 by the last day of the tax year whose investment income(interest, dividends and capital gains) exceeds $2,000.
The tax is computed using the parents' income tax bracket on the amount of income over the $2,000 threshold.
For the current year the investment income of children under age 14 will get more of a tax break. The first $1,000 of investment income will be tax free and the next $1,000 will be taxed at the child's tax rate. Amounts in excess of $2,000 will be taxed at the parent's rate.