Feature Articles
A New Type of Tax-Advantaged Account for Children
Families looking for another way to save for a child’s future may want to consider Section 530A accounts. Created by the 2025 tax legislation commonly referred to as the One Big Beautiful Bill Act, these tax-advantaged savings accounts, also known as Trump Accounts, are designed to help children build long-term assets. The ability to contribute became available on July 4, 2026, and some children may be eligible for a $1,000 government-funded deposit.
The Basics
A 530A account can be established for anyone who will be under age 18 at the end of the tax year and who has a Social Security number. U.S. citizen children born from January 1, 2025, through December 31, 2028, may also qualify for the $1,000 government contribution. Individuals and grandparents can make annual contributions up to a combined limit of $5,000.
Employer Contributions & Tax Benefits
Employers can contribute up to $2,500 annually per employee for eligible dependents under 18, which is excluded from the employee’s taxable income. Account earnings grow tax-deferred until the child reaches age 18, at which point the account transitions into a traditional IRA.
Choosing the Right Business Funding Solution
Access to capital helps small businesses succeed and grow. Understanding financing alternatives ensures you select funding that aligns with your operational goals:
- Lines of Credit: Draw up to a preset limit to manage temporary, periodic cash flow demands.
- Term Loans: Ideal for long-term investments like major equipment or property acquisitions.
- SBA Loans: Government-backed loan programs with competitive terms for qualifying small businesses.
- Invoice Factoring / Accounts Receivable Financing: Advance cash against outstanding customer receivables.
- Equity Financing: Raising funds through investors without adding immediate recurring debt burdens.
Plan Now for Deferring Tax on Advance Payments
For accrual-method businesses receiving advance payments for goods, services, or software licenses, tax law provides specific deferral opportunities under Section 451(c), allowing certain unearned revenues to be deferred to the subsequent taxable year rather than recognized immediately.
Tax Tips
- Single? You Still Need an Estate Plan: Without a spouse, state intestacy laws dictate asset distribution. Designating healthcare proxies, powers of attorney, and beneficiary forms is vital.
- Higher IRS Mileage Rates Take Effect: Be sure your expense reporting systems capture updated standard mileage rates for business, medical, and moving travel.
- Lending to Family or Friends? Know the Tax Rules: Loans made below the IRS Applicable Federal Rate (AFR) can trigger imputed interest income and gift tax complications.
