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Ep. 76 | Top 3 Parent Tax Strategies
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In this episode of the Teaching Tax Flow podcast, hosted by Chris Picciurro and John Tripolsky, they dive into the nuances of parental tax strategies. With a focus on empowering parents to legally and ethically minimize the taxes they will pay over their lifetimes, episode 76 is a must-listen for parents eager to optimize their tax planning. The hosts meticulously break down complex tax strategies that capitalize on the benefits of parenthood, offering a wealth of knowledge for the layman and experienced tax professionals alike.
In this episode, Chris and John outline three pivotal tax strategies designed to benefit both parents and children. Starting with the benefits of contributing to a Roth IRA for your children, they delineate how such contributions can grow tax-free, providing a nest egg for future needs. The hosts move on to discussing 529 plans, emphasizing their tax advantages and flexibility for educational expenses. As they explore nuances like gift tax exclusions and the implications of gifting assets, the potential tax savings for family estates come into focus. Through these discussions, the podcast ensures listeners are equipped with the tools they need to undertake informed tax planning.
Key Takeaways:
- Contributing to a child's Roth IRA can secure future tax-free income and growth, provided the child has earned income.
- Investments in a 529 plan grow tax-deferred and can be used tax-free for a beneficiary's educational expenses, with added benefits like potential larger contributions.
- Parents and grandparents can gift up to $18,000 per year to a child without incurring gift taxes, which can also facilitate income shift and estate planning.
Notable Quotes:
- "Roth contributions could be very powerful." - Chris Picciurro
- "The [529] expansion of what we consider an educational cost could include technology." - Chris Picciurro
- "It's easier for laws to pass to tax people that have passed away than people that are living." - Chris Picciurro
- "Not too many people are running around with that amount that they're concerned about hitting that estate tax exemption." - Chris Picciurro
- "Unfortunately, just financial and tax education and literacy is just not taught as much as it should be." - Chris Picciurro
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