Bank accounts or Roth (custody?) for under 18

[Anonymous]

My son doesn't have much in savings yet, just under $3K. I currently opened a HYSA under my name so he can get some interest from his savings. He also has some earned income. Less thank $1K a year, from doing umpiring during baseball season. He might get a PT job next summer which got me thinking about what's the best way to help him manage and save his money.

Under my current savings situation, any interest gets taxed under our higher income tax bracket, vs if he "filed" under his own SS, he technically wouldn't need to pay taxes on any of it since it's under $10K?

Also I heard it's better to save in a Roth or custodial Roth since he has "earned" income.

Welcome any advise on how to move forward to minimize taxes and maximize long term financial savings!

[Anonymous]

Roth under his name

[Anonymous]

You are in high tax bracket, which means you made decent money. Why would you be worried about tax on $150 ($3k getting 5% max). Don't complicate your or his tax situation trying to save on such a small amount.
If he indeed gets a paycheck, have him open a Roth and put the $1k in it. It's more important that he opens it and chooses his investments inside of it than trying to save on taxes.
Saving on taxes comes once he has enough income and need for that.

[Anonymous]

Anonymous wrote:You are in high tax bracket, which means you made decent money. Why would you be worried about tax on $150 ($3k getting 5% max). Don't complicate your or his tax situation trying to save on such a small amount.
If he indeed gets a paycheck, have him open a Roth and put the $1k in it. It's more important that he opens it and chooses his investments inside of it than trying to save on taxes.
Saving on taxes comes once he has enough income and need for that.

I'm not worried about a small % in taxes now, it's a little late in the year as it's been in my name whole time. Just wondering about what's best moving forward when he starts getting PT jobs as he's entering teen years and eventually in college. But sounds like Roth is a good option, so will look into that one.

[Anonymous]

Anonymous wrote:Roth under his name

+1.