Need some financial advice with taxes and setting up a few college funds

[One_Shot]

I have a couple side businesses that generate a little income. Instead of paying Uncle Sam each year, I was wanting to set up my niece and a couple of my friends kids with a college fund of some sort if possible. All of these kids are less then 4 years old, so the money will have time to grow if invested wisely. Not sure if this is even possible to do, if so, what is the best way to go about it?

Thanks in advance!
Kaleb

[Drycreek3189]

I have no clue but kudos to you for your selflessness !

[bowhntrmatt]

I'm unaware of any college funds that are tax deductable, but you may be able to make them employees of the company and pay them wages that then go directly into a Roth-Ira or something of the like. I'm not an expert on it, but I know there are many ways for business owners to do stuff like this. Or I gues you could 1099 them the money, and then their parents set up the accounts for them to put it in. Just keep the annual amount low enough that they don't have to pay income taxes.

[Walker]

I believe us savings bonds are tax free for college. Been a long time since I looked into it.

[rockyraider]

529 plans are the most popular vehicle for college savings. As stated, the contributions are not pre-tax, but as long as used for qualified college expenses, the growth/withdrawals are tax free.

[Burnadell]

I can’t give financial/investment advice on a forum, but I will say (as has been mentioned) that setting up 529 plans will not save YOU any taxes. Check with your financial advisor.

[boy wonder]

I can’t give financial/investment advice on a forum, but I will say (as has been mentioned) that setting up 529 plans will not save YOU any taxes. Check with your financial advisor.

Even a retired financial guru can’t give any advice?

[Burnadell]

Even a retired financial guru can’t give any advice?

Technically I’m not retired. I have 2+ months to go in my retirement TRANSITION plan.

[Double C]

I'm unaware of any college funds that are tax deductable, but you may be able to make them employees of the company and pay them wages that then go directly into a Roth-Ira or something of the like. I'm not an expert on it, but I know there are many ways for business owners to do stuff like this.

this is what I was going to type. The Roth can be used for college without penalty I believe.

Being so young, a CPA would have to advise on what employment compensation would be legit, but it can be creative. An example I heard is if you have their pictures on any advertising , even a back page of a website, you can pay them very well for modeling fees.