Tax Warrior Chronicles

Talking Taxes with Kids – 529 Plans, IRAs and 401(k)s

Posted on Thu, Aug 15, 2019

By: Stacie L. Court, CPA, MST


There are many benefits to contributing early to education plans, IRAs, and 401k’s – the largest benefit being the advantage of time to compound funds in tax-advantaged accounts.   Children have many years to grow the earnings in these funds, but how do you talk to your kids about the complex world of investing in these types of funds and encourage them to start early? 


Let’s begin by discussing these different types of plans:   


Section 529 Plans

A 529 plan is a tax-advantaged savings plan used to make it easier to save money for college, post-secondary training and tuition for elementary or secondary schools. 


Originally, 529 plans were designed to

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Millennial Series Part X: Saving for College - 529s vs. UTMAs

Posted on Tue, Nov 28, 2017

Planning for your child’s college education can be extremely stressful, especially with how much tuition seems to increase every year. We discussed several tax-saving options last week in a post. This blog post, however, will focus specifically on these popular options: 529 plans and accounts created under the Uniform Transfers to Minors Act (UTMA).


While both 529 plans and UTMA accounts offer a way to save for a child’s educational expenses, differences exist among these two options. Some of the most significant differences are discussed below.


Tax Advantages


Growth of funds inside an UTMA account are subject to income taxes. Only 529 plans allow for the contributions to grow

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