Bob Blumingdale Has a Dependent Son, Age 18, Who Is

question 21

Essay

Bob Blumingdale has a dependent son, age 18, who is a computer whiz. He is earning over $25,000 a year writing software programs for Hewlett Packard, even though he is a freshman in college. Bob has just learned about kiddie tax and wants to engage you for tax planning. How do you advise him?

---

Definitions:

Compounded Quarterly

The calculation of interest on the principal amount and any accumulated interest every three months.

Quarterly Withdrawals

The act of taking money out of an account or investment four times a year.

Deposit

An amount of money placed in an account, typically to keep it safe or to earn interest.

Annual Contributions

The amount of money contributed to a particular account or investment over the course of a year.