Would you like to give your children or grandchildren different kinds of gifts this holiday season? Financial gifts never go out of style. Some ideas: Stock or mutual fund shares. Your gift may spur a lifetime interest in investing. The “kiddie tax” rules (that subject a child’s unearned income to tax at his or her parents’ higher tax rate) are not applicable until a child’s investment earnings exceed $1,900 (2010 limit). Money for college. Section 529 qualified tuition programs have no income restrictions on contributions; Coverdell education savings accounts do. Both accounts offer tax benefits. Roth IRA contribution. This is an option only if a child has earnings from work. Contributed funds don’t have to be used for retirement, although leaving the money invested for many years offers greater potential for compound growth.
Presents for the Future
