The accounts known as 530A Accounts (a/k/a Trump Accounts), are available for children under age 18. Parents or guardians of babies born between 2025 and 2028 who open these tax-deferred accounts will receive a $1,000 initial deposit from the U.S. Department of the Treasury.
To help fund these investment accounts, a growing number of employers have said they’ll match the federal $1,000 contribution for their employees’ children. Those employers include…
1 – Bank of New York Mellon
2 – BlackRock
3 – Charles Schwab
4 – Charter Communications
5 – Chime Financial
6 – Chipotle Mexican Grill
7 – Comcast
8 – Goldman Sachs
9 – Intel
10 – JPMorgan Chase
11 – Micron Technology
12 – Morgan Stanley
13 – Robinhood
14 – SoFi
In addition, the Treasury Department and the IRS issued new guidance for a provision in the One Big Beautiful Bill Act (OBBBA) related to 530A Accounts. It provides a safe harbor so that individual donors to these accounts in a given year will not be subject to gift tax reporting requirements
As long as certain conditions are satisfied, including not exceeding this year’s annual gift tax limit of $19,000 per donor, taxpayers covered will not be required to file gift tax returns reporting the contributions. That’s $19,000 per donee.
If Granny and Grandpa each pitch in $19K for junior, that becomes $38K per year per child without the need to complete a gift tax return.
As of June 4th, the IRS had received nearly six million elections to open a 530A Account.
Let me leave you with this…
Several warning signals are flashing in our economy. It’s important for you understand what’s happening.
Devaluation Of The US Dollar
Since the beginning of the new administration, the US Dollar’s value has decreased by a little over 6%. This means that every dollar sitting in your savings account has lost a significant amount of its buying power.
I’ve written a lot about the Mar-A-Lago Accord, when President Trump sat down with Scott Besent and Steve Miran to discuss the economic policies of his second administration. One outcome of this meeting was the intentional reduction of the dollar’s value.
Why? This makes our exports more attractive to foreign buyers, which in turn puts more union workers to work. But another factor is at work in this devaluation.
For the last fifty years, if a foreign country wanted to buy oil from middle east producers, the transaction had to be done in U.S. Dollars. The purchase of so-called Petrodollars consistently inflated the value of the dollar.
Greater demand increased its value. But now producers like the U.A.E. are no longer accepting our currency for these transactions.
These purchases are now being completed in Chinese Yuans.
The Treasury Bill Crisis
The Treasury Department routinely auctions off Treasury Bonds to finance our out-of-control spending habits. But there’s a new wrinkle that just reared it’s ugly head.
The number of buyers for our debt is drying up. At a recent auction, the Treasury Department had to buy back $15B of its own debt because no one else wanted it.
They nicely labeled this a “Liquidity Event”, but don’t get caught up in the rosy nomenclature. Think about the implications.
Foreign buyers no longer trust our government’s ability to pay the interest on these bonds. With the record deficits our country has run over the past fifty years, how can you blame them?
And how did the Treasury come up with the $15B to buy back these notes? They printed it.
When you put more money into circulation, you further devalue any fiat currency, but that’s not even the worst part.
Another $9T and $10T of already issued treasury bonds are maturing before the end of this year. Who’s going to buy those?
Time will tell.
The Rise Of AI
Artificial Intelligence is a fact of life. You can scream and yell all you want, but it’s going to happen.
No one can stop this moving train.
It’s conservatively estimated that 11K to 16K jobs are being lost to this phenomenon every month. By 2030, another 10M to 15M jobs are predicted to be lost.
And what are these people going to do to eat? If they stay in the US, they certainly aren’t going to be paying any taxes.
What will that do to the deficit? I’ll give you 99 guesses as long as the first 98 don’t count.
The current administration and our largest tech companies are pulling out all the stops to ensure we win this race. Why?
Because whoever controls AI will probably control most of the world for the next couple of hundred years.
How much money do you think those out-of-work Americans will spend? What will that do to the economy?
Probably not great things.
Did Any Of Us Forget Tariffs?
They didn’t go away. They just got smaller.
By definition, this is inflationary. What does higher inflation do to an economy?
Again, not great things. And what will the Fed do to get inflation under control?
Higher Interest Rates
Most economists expect at least one or two interest rate increases next year.
What does all of this add up to?
No one knows. But again, probably not great things.
Our economy is incredibly resilient, but it does have its limits.
It’s important to realize that I’m not one of those doomsayers. It’s quite possible that America could get through this with flying colors.
Of course, the economy could just as easily go in the other direction, and we all know what that means. No one even wants to say the word “Depression”.
This isn’t a political statement. Before all of my friends on the far left or right start sending me hate emails, please know that the second I get one, you’ll be deleted from my email list.
My column is about helping entrepreneurs attain their dreams, not politics.
The real question becomes…
How does this affect you, your family, and your business?
Again, I don’t know. But this is the sort of thing that you need to start thinking about. I wanted to put all of this on your radar. Why?
Because it ain’t the snake you see that kills you. It’s the one hiding in the bushes.
See all of this for what it is. Make contingency plans. Think through the problem now.
See this snake coming before it bites you.
As always, if you’re having problems with your accounting and tax work, contact me today.
We’re all going to get through this. Let’s get through it together…
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, Accounting and Tax Work, Tax Planning, or Tax Representation, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
www.AccountingSolutionsLtd.com
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