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- Title
COLLEGE PLANNING: SHAKE HANDS WITH THE TAXMAN.
- Authors
Samson, William D.; McLeod, Robert W.
- Abstract
The article discusses personal financial planning with particular focus on financing a child's college education. Tax planning can help even high income parents to set aside money for their children's college costs. Before the Tax Reform Act (TRA) of 1986 parents were putting some income into their children's name in order to increase the after tax income. However, the 1986 TRA instituted what is called the "kiddie tax rules" to discourage this kind of income shifting. The rules state that parents’ marginal rates to not apply to children of age 14 or older who earn gifted income, and that each child has a full 15% bracket.
- Subjects
COLLEGE costs; FINANCIAL planning; PERSONAL finance; TAX planning; INCOME shifting (Taxation); TAXATION of children
- Publication
Financial Executive, 1993, Vol 9, Issue 5, p14
- ISSN
0895-4186
- Publication type
Article