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Financial Planning / Tax Strategies
|Subject: Re: Uncharted waters||Date: 6/13/2012 3:53 PM|
|Author: ptheland||Number: 116258 of 125706|
I rather expected Peter to bring this up since he practices in the Land of Fruit and Nuts, but maybe he's lucky enough never to have run into it. I, however, even during my brief CA sentence, learned a lot about child actors.
I had something on that in the draft reply kept in my head. Unfortunately, it must have leaked out my ears before it made it to my finger tips.
You are quite correct. The daughter's earnings are her money and not the parents'.
That money needs to be kept in a separate account so she can squander it herself when she turns 18. The parents cannot do the squandering for her. ;-)
More on track - that's where the IRA comes in. Putting her earnings into an IRA provides tax sheltered growth AND keeps the money in an appropriately separated account.
Then, when the kid squanders it at 18, the government gets a cut so they can join in the squandering as well.
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