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Started By
Message
re: Looking for how you all save for your kids (529 vs brokerage vs custodial)
Posted on 1/28/26 at 3:58 pm to Lazy But Talented
Posted on 1/28/26 at 3:58 pm to Lazy But Talented
We did what you describe in #2 but my wife and I are the custodians until they are 22. We have a couple years left. I am currently footing their school bill and I make them take out student loans. My oldest is not the strongest student and the money I have put away from him will pay of his student loans. My youngest got scholarships but we still make them take out what we can get for student loans. The money he gets refunded from the schools go automatically in Mutual Funds.
Neither kids really know what we have put away for them and when they can touch it. My oldest just recently stated he wants to start investing what he makes on the side at work. So it looks like he is ready to sit down and start talking numbers. Hopefully this is a start for him.
We started their accounts when they were young. I put what I could away. In the end, it should be enough for them to easily start life without student loans.
Neither kids really know what we have put away for them and when they can touch it. My oldest just recently stated he wants to start investing what he makes on the side at work. So it looks like he is ready to sit down and start talking numbers. Hopefully this is a start for him.
We started their accounts when they were young. I put what I could away. In the end, it should be enough for them to easily start life without student loans.
0
Posted on 1/28/26 at 5:59 pm to makersmark1
quote:
Was the basis 0?
I thought “gifts” had a 0 basis.
No that's not how it works. The tax basis and holding period carry over. I had him open an account w same brokerage to make sure the transfer was seamless. So, when he sells he pays his LTCG tax rate on just the gains since I bought (not entire gift amount just gains.) In this case, since he made less than $48350 (including LTCG) + Standard deduction (in 2025) his LTCG rate is zero.
I'll do more of this when my kids are young adults in college or starting careers until they get income up. It will be a.good way to get pit.of some single stock positions without paying taxes. I plan to hold biggest gainers until death so heirs get stepped up basis.
Posted on 1/28/26 at 9:57 pm to Lazy But Talented
Start a Roth IRA for your children
Posted on 1/28/26 at 10:08 pm to Louie11
How did you do that? My accountant said hell-to-the-no when I wanted to set one up.
Posted on 1/28/26 at 11:13 pm to lsuconnman
Kids just need income to start Roth contributions. If they dont work that would explain why accountant said no. Why didnt they explain it to you?
Posted on 1/29/26 at 5:42 am to TorchtheFlyingTiger
Thanks.
That is useful information.
I knew about “stepped up basis” on inherited assets, but I never explored “gift basis.”
That is useful information.
I knew about “stepped up basis” on inherited assets, but I never explored “gift basis.”
Posted on 1/29/26 at 6:38 am to makersmark1
If you own a business, pay your kids as "models" and take their picture for advertising. Give them income for it and you're set.
Google response below
Yes, you can pay your children for using their pictures in your business and use that income to fund a custodial Roth IRA. The work must be legitimate, the pay reasonable for the service, and properly documented (e.g., invoices,, tax records) to comply with IRS guidelines. The child can contribute up to their earned income or the annual limit ($7,000 in 2025).
Key Steps and Considerations:
Legitimate Business Use: The photos must be used for advertising, such as on a website, in brochures, or for social media marketing.
Reasonable Compensation: Payment must reflect what you would pay a stranger for the same service; excessive pay to shift income is not allowed.
Documentation: Maintain a record of the work, such as dates, photos used, and pay stubs. While not always required for very young children, it is best practice to have them, or you as their guardian, fill out a W-4.
Setting up the IRA: You can open a custodial Roth IRA (or UGMA/UTMA account) at a brokerage firm. You manage the account until the child reaches the age of majority (18 or 21, depending on the state).
Tax Implications: While contributions are made with after-tax money, the earnings grow tax-free. If a child earns less than the standard deduction ($14,600 in 2024), they likely won't owe federal income tax, but may owe self-employment tax if not incorporated.
Google response below
Yes, you can pay your children for using their pictures in your business and use that income to fund a custodial Roth IRA. The work must be legitimate, the pay reasonable for the service, and properly documented (e.g., invoices,, tax records) to comply with IRS guidelines. The child can contribute up to their earned income or the annual limit ($7,000 in 2025).
Key Steps and Considerations:
Legitimate Business Use: The photos must be used for advertising, such as on a website, in brochures, or for social media marketing.
Reasonable Compensation: Payment must reflect what you would pay a stranger for the same service; excessive pay to shift income is not allowed.
Documentation: Maintain a record of the work, such as dates, photos used, and pay stubs. While not always required for very young children, it is best practice to have them, or you as their guardian, fill out a W-4.
Setting up the IRA: You can open a custodial Roth IRA (or UGMA/UTMA account) at a brokerage firm. You manage the account until the child reaches the age of majority (18 or 21, depending on the state).
Tax Implications: While contributions are made with after-tax money, the earnings grow tax-free. If a child earns less than the standard deduction ($14,600 in 2024), they likely won't owe federal income tax, but may owe self-employment tax if not incorporated.
This post was edited on 1/29/26 at 6:41 am
Posted on 1/29/26 at 12:14 pm to TorchtheFlyingTiger
quote:
Kids just need income to start Roth contributions. If they dont work that would explain why accountant said no. Why didnt they explain it to you?
That’s exactly the reason. I want to know how you structure an income stream to avoid scrutiny.
Considering kids can’t even legally work until they’re 13. Even then, it’s a big red flag finding ones maxing their Roth mowing lawns.
Posted on 1/29/26 at 1:47 pm to JL
quote:
The work must be legitimate, the pay reasonable for the service, and properly documented (e.g., invoices,, tax records) to comply with IRS guidelines. The child can contribute up to their earned income or the annual limit ($7,000 in 2025).
So are there charts as to how much a “model” should cost at IRS website?
I’d be careful.
Posted on 1/29/26 at 2:07 pm to makersmark1
A 3-hour advertisement photoshoot with a model typically costs between $150 and $900+, depending on experience, agency, and usage rights. For freelance or newer models, rates are often $50–$100 per hour, while experienced or agency models charge $100–$300+ per hour, often with a 2-4 hour minimum booking requirement.
Estimated 3-Hour Cost Breakdown:
Novice/Freelance Model: ~$150 – $300 ($50–$100/hr).
Experienced Freelance Model: ~$300 – $600 ($100–$200/hr).
Agency/Professional Model: ~$600 – $900+ ($200+/hr + usage).
Factors Affecting Price:
Usage Rights: Commercial, billboard, or long-term digital use increases the rate.
Experience Level: Professional, published models command higher fees.
Type of Shoot: Specialized or intimate apparel may cost more.
Hidden Costs: Don't forget to negotiate travel, hair/makeup, and meals.
Tips for Budgeting:
Minimum Time: Many models require a 2 or 4-hour minimum, meaning a 3-hour shoot might be charged at a 4-hour rate.
Local Talent: Hiring via local Facebook groups or Instagram can be more budget-friendly than agencies.
Did I mention you also start the modeling agency so your kid can get professional pay. That was just an example. There are plenty of ways to get your kids justified income. This is the easiest before they can actually do physical work.
Estimated 3-Hour Cost Breakdown:
Novice/Freelance Model: ~$150 – $300 ($50–$100/hr).
Experienced Freelance Model: ~$300 – $600 ($100–$200/hr).
Agency/Professional Model: ~$600 – $900+ ($200+/hr + usage).
Factors Affecting Price:
Usage Rights: Commercial, billboard, or long-term digital use increases the rate.
Experience Level: Professional, published models command higher fees.
Type of Shoot: Specialized or intimate apparel may cost more.
Hidden Costs: Don't forget to negotiate travel, hair/makeup, and meals.
Tips for Budgeting:
Minimum Time: Many models require a 2 or 4-hour minimum, meaning a 3-hour shoot might be charged at a 4-hour rate.
Local Talent: Hiring via local Facebook groups or Instagram can be more budget-friendly than agencies.
Did I mention you also start the modeling agency so your kid can get professional pay. That was just an example. There are plenty of ways to get your kids justified income. This is the easiest before they can actually do physical work.
Posted on 1/29/26 at 3:48 pm to JL
quote:
There are plenty of ways to get your kids justified income. This is the easiest before they can actually do physical work.
My kids were teens and tweens before I had my own business.
I thought about how I could employ the kids, but I really do not have much they could do to help me. Maybe some clerical stuff, but only a few hours per month.
I thought about a home office, but it’s a little harder than “I work at home so my house is deductible.”
Posted on 1/29/26 at 4:31 pm to Louie11
I’m self employed and started in 2025. Opened through vanguard. They are 10 and 12. Time value is on their side.
Posted on 2/2/26 at 2:33 pm to Lazy But Talented
In July you can open a Trump account for any kid under 18 and parents can contribute max $5k/year for tax free growth until they turn 18 and it converts to a traditional IRA,,
Posted on 2/2/26 at 2:34 pm to Lazy But Talented
Starting in July you can open a Trump account for any child under 18 and contribute up to $5k annually for tax free growth till they turn 18 and it converts to a trad IRA.
Posted on 2/2/26 at 2:35 pm to JL
Trump Accounts are tax-advantaged investment accounts for U.S. citizen children under 18 with a Social Security number. A $1,000 government-funded, invested pilot contribution is available for children born between January 1, 2025, and December 31, 2028, with accounts established by parents or guardians.
Key qualification details for a Trump Account include:
Age and Status: The beneficiary must be a U.S. citizen under the age of 18 at the end of the calendar year.
Identification: A valid Social Security number is required.
Pilot Program Eligibility: To receive the $1,000 federal grant, the child must be born between January 1, 2025, and December 31, 2028.
Account Setup: Parents, guardians, or authorized individuals must submit IRS Form 4547 to establish the account.
Contributions: While only certain children get the $1,000 seed money, any child under 18 with a Social Security number can have a Trump Account opened for them, with up to $5,000 in annual contributions from parents, family, or employers.
Accounts are designed for long-term growth, with funds invested in {Link: index funds. The program starts accepting contributions in July 2026, notes {Link: Yahoo Finance and the {Link: White House (.gov).
Key qualification details for a Trump Account include:
Age and Status: The beneficiary must be a U.S. citizen under the age of 18 at the end of the calendar year.
Identification: A valid Social Security number is required.
Pilot Program Eligibility: To receive the $1,000 federal grant, the child must be born between January 1, 2025, and December 31, 2028.
Account Setup: Parents, guardians, or authorized individuals must submit IRS Form 4547 to establish the account.
Contributions: While only certain children get the $1,000 seed money, any child under 18 with a Social Security number can have a Trump Account opened for them, with up to $5,000 in annual contributions from parents, family, or employers.
Accounts are designed for long-term growth, with funds invested in {Link: index funds. The program starts accepting contributions in July 2026, notes {Link: Yahoo Finance and the {Link: White House (.gov).
Posted on 2/2/26 at 2:40 pm to JL
Unless it's just to get a match, a taxable brokerage offers better tax treatment than these Trump accounts. Why pay income tax rates when you can pay preferable LTCG rates with no restrictions on withdrawals?
Posted on 2/2/26 at 2:51 pm to TorchtheFlyingTiger
Maybe I'm thinking wrong, but when your kid turns 18 and has no income they could convert it to a roth IRA and you pay taxes and then it can grow tax free from there till they retire?
Posted on 2/2/26 at 3:34 pm to JL
There may be a niche use case where a Roth conversion under the standard deduction would be advantageous. Otherwise, LTCG treatment is better than paying income tax rates on conversions or withdrawals.
Posted on 2/2/26 at 4:26 pm to lsuconnman
quote:
hell-to-the-no when I wanted to set one up.
Probably because IRAs are supposed to be funded through income producing activities. One of my friends "pays" hits kids to be in adverts for his practice, and I just "pay" my 13 year old for mowing the lawn with direct contributions.
But, the 530A makes those smoke and mirrors largely unnecessary.
The 529 is still great, especially as you can use it to pay for certifications (and their renewals) as an adult, you can pay for adult classes, grad school, etc.
Posted on 2/2/26 at 9:11 pm to Lazy But Talented
The Louisiana 529 allows you to roll up to 7k yearly into a Roth for 5yrs.
She has about 100k in there and about 20 more months until college. It should be around 120k when she is ready.
She will get plenty of scholarships so my plan is to use it for “living expenses” and buy her a piece of property to rent out to friends and live.
Whatever is left after she completes school will be rolled into her Roth.
That’s my plan anyway. She graduates without debt, a piece of property, and a few bucks in her Roth.
She has about 100k in there and about 20 more months until college. It should be around 120k when she is ready.
She will get plenty of scholarships so my plan is to use it for “living expenses” and buy her a piece of property to rent out to friends and live.
Whatever is left after she completes school will be rolled into her Roth.
That’s my plan anyway. She graduates without debt, a piece of property, and a few bucks in her Roth.
This post was edited on 2/2/26 at 9:12 pm
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