Spouses and Family

How Much Should Parents of Young Children be Saving in 529 Plans?

To deal with this logically, you have to back into the figure after making a few assumptions. Let’s say you have a five year old child that you expect will one day attend an expensive private college. The tuition, fees, and room and board at such a college cost roughly $70,000 per year today or […]

If You Don’t Have the Money to do Both Simultaneously, Should You Save For Your Future Retirement or For Your Child’s Future Education?

Each of us has to answer that for him/herself, but here’s my take on it. I’d opt for retirement savings first. My primary reason is that there is outside help available for a child’s education, but not for retirement. Loans are available to fund college expenses but are not available to fund retirement costs. My […]

Merit Scholorships Readily Available to High Caliber Students

A Silver Lining With Rising College Costs – These Colleges are Dramatically Increasing Their Merit Scholarships to Attract Top Students:  Pricey colleges that aren’t at the highest tier are working hard to counter the public perception that their degrees aren’t worth the cost – that is compared to some excellent lower-cost state schools or the […]

$12,000 Standard Deduction Helps Children on the Payroll

The New $12,000 Standard Deduction Will Help “Older” Children or Grandchildren Who Are Earning An Income Through Your Practice:  Many Newsletter readers employ young children in their practices so that these children become eligible to fund Roth IRAs.  The decades-long growth potential is massive even with the relatively modest contributions made each year.  If these […]

“Friend” Your Patients on Facebook at Your Peril

If you participate on Facebook, understand that your Facebook profile is personal and should only be open to friends and family.  You remain in control by affirmatively “friending” those whom you are comfortable viewing your personal photos and posts.  Do you really want your patients having access to your private life, e.g., having too much […]

Investing a Child’s Roth IRA

If a child is still a minor, then the money will be held in a so-called “custodial” Roth IRA where a parent (or grandparent) has control until the child reaches adulthood.  If your goal is to use these accounts to build meaningful wealth over a long period of time, then the investments should be growth-oriented […]

What Happens When the Child Turns 21?

In our home state of Ohio, the custodial aspect of this account ends when a child turns 21.  We are currently six years from this day of reckoning with our first child.  Charles Schwab is the custodian of these accounts, and their procedure is that they will send a letter to our home, addressed to […]

The Long-Term Impact of Underpaying Your Young Children to Work in Your Practice

The dentist’s accountant was nervous that he was paying his young children $5,500 per year to work in the practice using the children’s images for marketing purposes.  He said he’d be comfortable with the children earning only $1,500 until they reach ten years old.  Consider the long-term wealth reduction if the dentist adopts this conservative […]

Health Insurance “Discrimination” In the C Corporation

Can the C Corporation Cover the Insurance Costs (Including Medicare) of Just the Doctor (and His or Her Family) But Not Cover Others? Yes.  Under IRS Regulation 1.105-11(b), you can discriminate based on classes of employees, but not based on ownership status.  For example, there can be a Board of Directors resolution that the corporation […]

Children’s Education Funds

There can be other methods, but the four ways we typically see parents save for future education costs are in one or more of (A) an account in the parent’s name, (B) a custodial account for the child, (C) a Roth IRA for the child, or (D) a Section 529 plan for the child.  Here […]

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