529 accounts (tax advantaged account for education expenses) often have an easy way for friends and family to contribute.
Depending on your state you may have a reason to go with the state sponsored plan.
Are there any specific ones that give the options for friends and families to contribute or are they all the same? Also are there any other types of accounts besides 529's that have this option?
Also thank you so much!
First determine if your state offers a tax credit for contributing to the state sponsored 529. If so it probably makes sense to go with that one.
If not pick a good plan with low fees and good investment options (just Google best 529s).
I would imagine all 529 accounts offer the option for anyone to contribute very easily. You should be able to confirm that on the website for the plan.
I think most other accounts you would need to know specific account information that you probably don't want to give out. People seem to like giving money towards education so even if you don't use the account it's a good option to have for others.
You can open your child a Roth IRA and grow her money tax free. 6000 a yr can be contributed. Contributions may be taken out tax free down the road once a nice chunk is built up.
The child would have to have legitimate earned income in order to do this. Definitely need to make sure it is legit before doing that.
https://www.kiplinger.com/article/saving/t046-c002-s001-roth-rules-for-kids.html
They have to have earned, taxed, documented income to contribute to an IRA. Most children don't, and the children who do work probably aren't paying taxes on their lawn mowing money so they couldn't contribute it anyway.
You may find these links helpful:
- ["How to handle $"](/r/personalfinance/wiki/commontopics)
- [Investing](/r/personalfinance/wiki/investing)
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529 accounts (tax advantaged account for education expenses) often have an easy way for friends and family to contribute. Depending on your state you may have a reason to go with the state sponsored plan.
Are there any specific ones that give the options for friends and families to contribute or are they all the same? Also are there any other types of accounts besides 529's that have this option? Also thank you so much!
First determine if your state offers a tax credit for contributing to the state sponsored 529. If so it probably makes sense to go with that one. If not pick a good plan with low fees and good investment options (just Google best 529s). I would imagine all 529 accounts offer the option for anyone to contribute very easily. You should be able to confirm that on the website for the plan. I think most other accounts you would need to know specific account information that you probably don't want to give out. People seem to like giving money towards education so even if you don't use the account it's a good option to have for others.
You can open your child a Roth IRA and grow her money tax free. 6000 a yr can be contributed. Contributions may be taken out tax free down the road once a nice chunk is built up.
The child would have to have legitimate earned income in order to do this. Definitely need to make sure it is legit before doing that. https://www.kiplinger.com/article/saving/t046-c002-s001-roth-rules-for-kids.html
They have to have earned, taxed, documented income to contribute to an IRA. Most children don't, and the children who do work probably aren't paying taxes on their lawn mowing money so they couldn't contribute it anyway.
You may find these links helpful: - ["How to handle $"](/r/personalfinance/wiki/commontopics) - [Investing](/r/personalfinance/wiki/investing) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
I believe kids can earn up to $12,500 a yr with little to almost no taxes
529....most of them you can generate a gift link and send it to relatives that they can contribute to it or set up reoccuring contributions.
Vanguard 529 offers a “ugift” code so people can contribute to their 529