西部落：为孩子攒大学学费的高招（在线收听）

And here is your " Need to know" for today. The question: What is the best way to help your kids while helping yourself? What a concept! And you wanna save for your child's future ? Well, get an IRA for the kids and then hire them. Just a couple of ways that can help save you money for those mounting college expenses. Joining us is Fox business contributor Jonas Max Feras. He is the founder of the Maxfunds.com and of course a regular on Cashing-in. What a great time for a question like this, my son is about to leave for college. Is it too late? What could people do?

How... how old is he?

Too, too old.

Okay, (it) basically would happen is Congress changed the taxes, in, in an effort to keep taxes low, they have to crack down on the abuses of stock. This has been going on now for 30 years since Ragan lowered income tax and got to buzz people that were cheating to make a way to pay for it. What they basically did was raise the Kiddie Tax to 18. What was going on here is if your kiddo is between essentially 14 and 18 and you earn a high bracket. You can kinda hide money in their name and they'd be paying this low, this low rate.

That's why our parents have those passbooks, well~you... you usual...you used to actually make money.

Well, what if you'd be well-off, if you, you actually can know with the rates gone up but it's another story. Anyway, the point is if you're paying taxes, say a 30 percent on your income, say a bounder or passbook saving or anything, your kid/ could be paying at 5 percent or less.(Okay) So you'd hide money there, that game's gone, you can no longer hide money in your kids' name, especially if you earn a high bracket than a low bracket, by the way, this is really bad for kids who're actually working teenagers and their parents are rich but don't support them,they get to pay~

Separate apart from the taxes, I wanna know how I can hire my kids to do chores, (Okay) pay them and pays off.

If you have... if you have a business, you can hire your kid as an employee. That money that you pay them is deductible to you as a business. you get in a write-off. They can then, start some sort of IRA or 529 to some extend and shield that, so they won't pay income tax on that either and basically you are getting a write-off, they are not paying tax on it. You hide money from Uncle Sam essentially. It's technically legal, you did some complexor theory to start here, you catch the accountant, But that is either..another way is to 529 plan, if you live in the state, this is totally on the level on the jet. If you are not to deal with other thing...

That's why we wanna stay.

If you... if (inaudible) 529 , if you are in a state with a high state income taxes and your parents earn a high bracket. They can save money for your college that way. It is like an IRA for college in a nutshell...(So it really works.)

Yeah. you don't avoid federal tax, you avoid state.

And new deductions for paying tuition.Is that situation improving?

One that I would say related to that is don't put your money in your kids' name if you think you'll need a financial aid because that's what the governement looks at first. You wanna keep money in your parents' stamp. They look at that too, but not as much.( OK). So if you're not very wealthy and you're looking to get that. That's..

Jonas Max Feras gotta run. Thanks so much. Little help for the parents trying to pay for college, keep those emails coming on Legal and Money Matters and tell me what you need to know just email me at [email protected]. We might answer your questions on the air.