Dear YOUNG MONEY,
My son is very interested in getting into the stock market. He is 16-years-old and I feel comfortable with letting him try it out. I will be here to back him up and help him out.
My question is: I don’t want to pay taxes on the money he makes. How can I make it so that he has to pay his own income tax? I would really appreciate any kind of advice you can give me. No one seems to want to answer this question for me.
Thank you for your time.
You should consider opening a custodial account. You could be the custodian for your son and the account would be under your son’s Social Security number. Therefore, your son would pay the taxes at his income tax rate.
Keep in mind that upon reaching the age of majority, the assets in the account are legally your son’s and he will have full control at that point. This may or may not be an issue for you depending on who will be funding the account and how responsible your son is at handling money.
“Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS we are not qualified to render advice on tax or legal matters.”
To Your Success,
Raymond James Financial Services
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