ways to save tax/money in the investment for kid:

ways to save tax/money in the investment for kid:

1.Saving in a Child\'s Name. open an account in the bank in child\'s name. the parent is the custodian. This way, if child\'s total investment income including interest, dividend,capital gain, etc) is not more than $1,800 in a year, all the investment income are taxed in child\'s tax rate(generally, not taxable at all due to the final $0 taxable income of the child.)

2. Coverdell Education Savings Accounts(CESA or Education IRA):The earnings(such as interest) on the CESA are tax free as long as it is used in child\'s elementary, secondary, and college expenses. you can contribute to your child\'s CESA up to $2000 a year. But the contribution is nondeductable in your tax return.

3. 529 plan: a college savings plan. Almost every state allows a deduction(subject to limitation) of your contribution to this plan each year . It means , your contribution to this plan will be subtracted from your income in state tax return. also, the earnings on the plan is tax free each year.