Newsletter

News for Newborns: The Trump Account

I hope this notice finds you well! I wanted to share some news regarding a new initiative that can benefit children born in the United States between January 1, 2025, and December 31, 2028.                                                                                                                  Under the recently passed One Big Beautiful Bill Act, every newborn will be entitled to a special savings account known as a Trump Account.

Here's how it works:

1. Initial Deposit:

Each eligible child will receive a one-time

government deposit of $1,000 into their Trump Account.

This provides an excellent initial opportunity for families

who wish to plan and save for their child's future.

2. Additional contributions:

Parents and guardians can contribute up

to $5,000 annually to the account until the child turns

18. Additionally, employers can contribute up to $2,500

per year, which does not count as taxable income for the

parent.

3. Investment Growth:

The funds in the Trump Account will be invested in low-cost index funds,                                                                                            allowing the money to grow over time. While the account is generally

locked until the child turns 18, it can provide financial support for                                                                                                    education, a first home, or other important milestones.

4. Tax Benefits:

The money in the account grows tax-free while it remains there,                                                                                                          and withdrawals after the child turns 18 will be taxed as ordinary income, similar to an IRA.

5. Eligibility:

To qualify, the child must be a U.S. citizen with a Social Security number.                                                                                            The government plans to start opening these accounts in mid-2026.

This initiative aims to encourage families to save early and build wealth for their children, providing a solid foundation for

their financial future. It's a good opportunity for parents to invest in their child's long-term success!

If you have any questions or would like to discuss this or other  tax matters free to reach out.

 

Best Regards,

Jeff C