Alright, I did something this morning for my kids,
and it's a process I want to share with you all,
and it is the specific process on setting up the Trump account.
So, throughout all the tax returns that we've been filing this spring for 2025
and through this year so far, we've had quite a few questions about how
to set up the Trump account, and I'll explain what that is if you
don't remember or if you haven't heard of it yet, but how to set
up the Trump account, the specific websites,
the specific process, the timing of it,
the different dollar amounts. I'm going to jump into all those details.
and I'll stay pretty high level. I just want to get you information that
is actionable and is helpful to you as you're looking to set these accounts.
So if you're looking to kids or if you've got grandkids, you want to
help them get accounts set up as well. And there,
at the end, there are some strategies as a business owner. Or if you're,
if you're doing the payroll, how you can get additional funds into these accounts
for your employees, or into your employees' kids.
Kids' accounts, and how you can save on taxes there,
in, in a way of getting them, some sort of benefit without having to
pay taxes on it. So, to start, so I'll, I'll go,
I'll go through the exact process I did this morning.
And so, one of the common questions we get is,
is, hey, I need to file this specific form.
It's the form 4547, I need,
or telling us, I need to file this form on my tax return to
get the benefit. And the answer is, because the short answer is you don't
need to file it. There's a,
a separate way to do that. So I filed my tax return and I
did not file that form on with my 2025 tax return.
I went to this website and I did this process that I'll explain to
you right now. so I went to, if you go to Trump accounts.
That's the easiest thing to remember the,
where you can get some of the other links, but it go to trumpaccounts.gov.
Right now, there's a lot of information, like a lot of frequently asked questions.
It'll, it'll cover quite a bit more than I'm even going to cover on
the podcast today, but I would go there.
Want to get familiar, and maybe it'll answer a few of your other questions,
but it, it gives you the links, so there's kind of tips and two
main areas, two main things that you need to do,
so it'll reference you to the app, so there's a Trump accounts,
I think, I just downloaded it, I think it's called Trump accounts official app,
and you'll see, like, they're in partnership with Robinhood,
and eventually, here's, in July,
like, in a month from now, we're gonna see,
like, I'm expecting you'll be able to see, like,
your kids' accounts, you'll be able to see the balances. You'll be able to
see where things are invested, and,
so, the other thing, so it'll link you to download the app,
and it'll download it'll tell you to download the app, and then the other
thing it'll link you to, it'll prompt you or tell you to go file,
file the form 4547. You,
and it sounds like an official tax form,
which it is, but you're not having to,
like, manually update a PDF or whatever.
You don't read through instructions of a tax form. You don't need some fancy
professional e-file service for it. You don't need to pay someone to fill out
this 45. 47. And that's why I'm getting this information across to you now,
because I know you can do it. If you've got kids,
you can do it for your kids. It's really filling. Filling out,
and I just did this, it's filling out as long as you've got their
name, their social security number, their address.
That's it. That's all you need. And you need their birthday,
too. and one thing, so I've got five kids.
They've only let me fill it out for four of my kids.
And I thought that was so dumb. Like, if it's a paper form,
I know there's limitations, but an online form limits everything.
So limited me to adding four kids.
But what I did, if you have more than four kids,
maybe not a lot of you, use it,
you might not, but if you have more than four kids, you can finish
the application with the first four and then close it out,
open it back up, be satisfied. time back in and you just go begin
the form again and you'll see your list of kids there that you've already
submitted for. You go and begin the form again.
And you can list your 5th,
6th, 7th kid. You can list all the additional kids.
So, that is, you go to trumpaccount.com.
You click on File Form 4547.
That takes you to the IRS site. So, where I just explained where you
add all your kids. That actually pulls you from the Trump account site.
You go to an official IRS site.
So, it'll ask you to set up you need to set up an ID.me
account, which, you know,
it, I think it does like a facial recognition thing,
but it's pretty quick. The IRS has gotten pretty modern over the last couple
of years with this, these online account verifications.
They no longer need to send you a mail or,
or something. In the mail, the Verify Your Identity,
you can do it right there. You probably, I think you need to scan
your driver's license, your ID, and you can set a,
set up an account right away. And so,
click the form, file form 4547,
literally, add, start adding your kid's information,
and here's, you don't need to,
like, make an option or anything. Because the tool online
will automatically detect their birthday and really the real a the date
you need to worry about or just be be aware of is if you
have a child born in 2025 in 2021.
In 2025 through 2028,
those kids have an extra opportunity where they get a thousand dollars of savings.
They get money from the government if they're born in 2025
or later. If you have kids born before 2025,
Like all my kids,
all my kids are older than that. I don't give a thousand dollar seed
money for any of my kids. But there's a $250
potential seed money for the kids.
And that's if you live in.
and they, they actually, they haven't come out with the zip code specifically.
They don't have like a, a search, a searchable.
database for the zip codes that qualify right now,
but if you live in a zip code where the median income is less
than $155,000. Then you're,
you'll qualify, but you don't, you don't need to go see if you qualify
or it's not going to stop you. You're not going to be in trouble
if you submit these forms.
It's just going to automatically verify if you qualify for,
or not. And that's for the $1,000.
If your kid was 20-25, that's for the extra $250.
That's like from the Dell family, and I think,
a couple other things. Other families are,
are adding to this pool of funds. They get a big deduction,
of course, but it's for the extra $250 to go into.
These, these other kids, the older kids accounts.
And so here, here's what's going to happen. So the status of it right
now. It's like, so I did both.
I filled out this form 4547 on the IRS website and I,
I downloaded the Trump accounts app. Hopefully the,
the Trump accounts app, all it does, you create the account and then it
says congratulations. Congratulations, we'll let you know when your account is active,
basically. Or like, we'll let you know when you have an invite to log
in. Because right now, it's,
it's not fully active. It's, it's got a pretty slick interface to get set
up as far as the login information goes,
but once you log in, there's, there's nothing there. You don't see your kid's
accounts yet. There's no,
you're not allocating investments. You're not seeing how much money is going to your
kid's account. So I. You could go set it up just so you're on
the list when the money starts getting released here in two or three weeks,
July 4th. I think is the expected launch date still,
but from the 45-47 side on the IRS website,
once you fill that out. It's just, you've got your online account.
It'll show you that you submitted the forms and filed that election.
But again, that's, There's nothing else that happens.
It's just, you've got your,
you've thrown your, card into the hat, I guess,
and you're just waiting for the government to open up your accounts,
and link your accounts, your kids' accounts to Remember,
it's not your account. These are,
your kids' accounts, these Trump accounts, are your kids' accounts,
that you're managing, or that you're in charge of the logins,
and you're managing it. Until they turn 18,
and then the account's transferred to them. So,
that's, that's kind of how it goes. For now,
and again, so I talked about the $1,000 seed money,
that's for young kids born in 2025. The $250 will go in if you
live in a median, zip code of $155,000 or less.
And what if, what if you don't qualify for either of those?
Let's say you did what I just did, and I honestly,
I don't know the median, income of $155 of my zip code quite
yet. I could probably look into it, but let's say I look into living
in a zip code that's higher than that, and so my kids are all
older, and so they're not getting the $1,000.
If I'm not in the right zip code, we're not getting the $250. July
4th rolls around, I get the email,
they say congratulations, your accounts are set up for my five kids,
what's next? What's gonna happen? I'm gonna have five accounts set up,
I'm expecting I'm gonna be able to access them in the Trump Accounts,
the Trump Accounts app. But there's not gonna be any money in there yet.
Like, that's, so this is the strategy,
so if you've made it this far, hopefully this is where I want to
talk about the strategy. The strategy of, okay, now the accounts are set up,
what are we even doing with these accounts? So one from an individual,
like, you as a parent or a grandparent, and the impact on your kids,
like, in the long term, we'll talk about that, but then,
like, as an employer, what are some of the opportunities and strategies you might
be able to do for your, for your employees' kids' accounts as well.
So, July 4th rolls around. I get access to five accounts.
It's got all five of my kids listed. We've got no money in there.
So I go, okay, great. If I just, close the app and I don't
do anything with it for 15,
20 years until my kids grow up.
Nothing's gonna happen. They're like, they're, they're not gonna have any funds accumulated.
There's not gonna be any benefit. It's just nothing will have happened.
So. You need to actually take some action,
and that, that's what I want to talk about right now. So,
there, there's online calculators, I think even on the Trump account.
Like, what if you put in $50 a month,
or $50 a year, or $500 a year, or $5,000 a year?
They go through those three examples. And, like, what it might look like when
they're 18, what it might look like when they're 60,
versus when they're 80, and it's, it's very satisfying.
If, if you put in 5,000 a year,
until, oh, how old was it,
I think, until they're 65, it's pretty it's going to be,
like, a value of $13 million,
ah, when they retire. So, it, it can be pretty substantial,
at least the, the estimates. But here's,
here's my plan, what I'm going to do with it.
So, I do want to put some money in there. So, this is,
it's an alternative to like a Roth IRA.
It's very similar to a Roth IRA, but the kids don't need it.
It's an earned income. Like Roth IRAs for your kids,
you can't just put money in there unless they actually had a job or
they had some earned income. These accounts,
you're really, you're f funding their retirement.
you're not getting the deduction. They're not getting a deduction either,
but the benefit of the benefit is that the money grows tax-free.
And that's the real benefit of it. The money can grow tax-free.
You're funding it before they're even working.
So they're getting an earlier start. parents,
yeah, of course, parents can fund their accounts.
grandparents can fund their accounts, and you can
actually put in, well, if I looked up,
as an employer, I actually might need to look this up,
an employer can put in up to $2,500.
So this is what I'm, I'm thinking about right now.
An employer can put in $2,500. $2,500 for their employees'
kids, and it looks like that does not mess with.
the amount that the parents and,
like, grandparents or friends can put into the account,
which is $5,000 a year. So.
Parents and grandparents can put in $5,000 into these accounts a year,
and that's the max. You can put in $100, you can put in $500.
$5,000 each year,
but employers, so if I have an employee,
and I say, hey, I want to give you a raise, but if you
don't want to pay taxes on it, and you don't want to pay payroll
taxes on it, here's, like, a benefit.
Here's an employee perk. We can fund your,
your kids' Trump accounts directly.
I, as a business owner, I get the deduction directly.
Like, if I, I fund it with $1,000,
I, as the business owner, get a $1,000 deduction.
But then. The kids and the employee,
they're not paying any tax on that. It just goes straight into their kid's
account. So it's a benefit for them and they don't have to pay taxes
on it, which is great. Pretty sweet. So remember the $5,000 limit a year
for yourself funding your own kids. So for your,
each of your kids accounts is $5,000 and then as an employer you can
put into 20, you can put up to $2,500 into your kids or employees
kids accounts. That's pretty cool.
let's see. So the other thing, so the last thing I'll bring up here.
But remember, so the money in these accounts,
it is similar to a Roth. In that it grows tax-free,
but when the money's withdrawn, it, you do pay tax on the growth.
Like, you do pay tax on the earnings,
but, and, and it's similar to a retirement account where there can be a
penalty if you withdraw it before you're 65.
So the government really wants to incentivize us to keep the money in our
kids' accounts until they're in retirement, of course.
Trump really wants the stock market to do well,
and by keeping more money in the stock market,
I'm thinking that's their plan, of them wanting it to do well.
but when you, when you pull it out,
you're paying tax on the growth. And if you're,
if you're not 65 yet, there's a 10% penalty as well,
like other retirement accounts, unless it's for a first time home.
let's see. There are the specific dollar amounts,
and I, I, I wish they were a little higher,
but, so, if you pay for tuition,
fees, or books, you're not,
you don't have to pay the $10,000. percent penalty on that.
If you're a first-time homebuyer, that's the first $10,000.
$10,000 is exempt from the 10% penalty.
And then, yeah, for birth of a new child or adoption, you can withdraw
that $5,000,
penalty-free. It's waived on, on that example as well.
So there are the Trump accounts and I know I covered quite a bit,
but just remember if you go to trumpaccounts.gov,
there's two things. You go and download the app. That's where you'll access.
That's the accounts into the future and you click on the button that says
file form 4547. You do not need to file it with your individual tax
return. You can, but what we found for you to get quicker access
to it, you have to log it. You have to go online anyways to
create your account. To access all of this,
filing it on the tax return isn't going to create your online account.
So you need to go do that online anyways, and so you can just
do it in the same step. So we've been recommending to clients to not
file it with their tax return because it's, we're not seeing any benefit of
it. And for you to get notified,
for you to get this account set up right away,
I'd go to the trumpaccounts.gov. So that's kind of the high level,
but very specific steps of what to do for the Trump accounts.
Hopefully that's helpful. I think it, it's helpful. I think it's pretty exciting.
Like, I think saving for retirement is a, is an important thing and I,
I'm excited. To start showing,
I'm probably not going to like look at it every month with my kids,
but at least a couple of times a year we'll look at the funds
in the account. We'll look at the growth. I think it's exciting.
It's just a great opportunity for you to teach your kids about,
financial health and investing and taxes.
Not a lot of parents teach their kids about taxes,
but I think it's a great thing to do. And you can just help
them plan out their future. So, I think it's a great thing.
Uh, but you have a good rest of the day. And we will catch
you next week. See ya.
