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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 585
Experience:  10 years experience
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Owner owns a business that is a c corp and want to help with

Customer Question

Owner owns a business that is a c corp and want to help with college tuition for grandkids, wondering the best way to get the dollars to the kids,can always take the money personally pay income tax, then gift but would like to not pay income tax if he doesnt have to.
JA: The Accountant will know how to help. Is there anything else the Accountant should be aware of?
Customer: $10,000 each for 2 grandkids this year.
JA: OK. Got it. I'm sending you to a secure page on JustAnswer so you can place the $5 fully-refundable deposit now. While you're filling out that form, I'll tell the Accountant about your situation and then connect you two.
Submitted: 11 months ago.
Category: Tax
Expert:  Mark Taylor replied 11 months ago.

Hi, my name is Mark. I would be happy to help you.

Expert:  Mark Taylor replied 11 months ago.

How old are the grandchildren?

Customer: replied 11 months ago.
20 and 18 -
Expert:  Mark Taylor replied 11 months ago.

There are a could of ways that this could be handled. There is no way to avoid taxes. He could hire the grandkids as employees. He would be able to deduct the payments on the C-corporation. He would of course need to pay associated payroll taxes. The grandkids would need to pick up the wages as income. Most likely the tax impact to them would be minimal. Another option would be to contribute the $10,000 into 529 plans for each grandchild. The earnings from these accounts grow tax free and the distributions are tax free as long as they are used for qualified educational expenses.

Expert:  Mark Taylor replied 11 months ago.

Hi Earlene, my name is***** will be happy to help you with your question.