Just curious on what is minimum age to open bank account for kids?
How does it work in terms of tax returns?
Youngest Age to Open Kids Account
yjun355 on 31/07/2024 - 14:48
Comments
Few thousands a year
2000 in interest is 40,000 for each kid. Can you be my parent?
lol. Sorry i meant principal. Just for gifts, etc.
Looks like doesn't make sense to open high interest for kids as you get taxed at high rate.@yjun355: I think (verify for yourself) the limit for "earnings" is $450/yr before the laws kick in. So that's about 9000. So you should be alright with something like a macquarie transaction account, has interest and a debit card for spending.
You are going to get ripped off with tax (66%)… ATO does not like tax avoidance using children's accounts.
https://www.ato.gov.au/individuals-and-families/investments-…
Children are not exempt from quoting a TFN, and you can apply for a TFN as early as you like. The website above explains how tax returns work
Bank acc also has no minimum age, but usually under ages 13~14 you typically open a joint bank account, if >14 kids can often open their own account by themselves without parent consent. (rules differ from bank to bank)
Children are not exempt from quoting a TFN
The do not need a TFN and there is no withholding tax until they exceed the maximum interest earned for their age group.
You can open it as early as you like once you've got the documentation in place.
The most important consideration for that is that unless it's excepted income, any tax on the interest generated will generally be taxed at the highest rate. This is to discourage parents from moving funds to their children's names - but things they genuinely earned (like from work, a business, or inheritance etc), and interest generated on these amounts, will be excluded. Notably, gifts aren't excepted income - so if you give them money and they generate interests on that money - it'll generally be taxed at the highest rates:
2024-2025 Minor Tax Rates
$0 – $416: Nil
$417 – $1,307: Nil plus 66% of the excess over $416
Over $1,307: 45% of the total amount of the income that is not excepted incomeRelevant reads:
ATO - Children's savings accounts
ATO - Your income if you are under 18 years oldThanks a lot. This is really helpful.
Making TFN makes sense. With ETax it is easy to do online returns especially with all the pre-fills.
Looks like they consider under 16 as minor and above tax rates.
I guess other alternative is just to create another parent account and track through there until they are in their early teens. Then would make sense to open those WestPac youth saver accounts.
I guess other alternative is just to create another parent account and track through there until they are in their early teens.
or a trust fund.
speak to an accountant.
i don't think there's a minimum age. just need to provide docs, usually medicare + birth cert.
Opened one for my kid at 3 weeks old.
Generally, accounts for children are opened in the parent name, as trustee… 'Joe & Mary Smith as trustee for Billy Smith'. The parents put their TFNs on the account and any interest the 'child' earns goes towards the taxable income of the parents.
The alternative is to organise a TFN for the child, where any interest earned would go toward their taxable income - which isn't an issue unless they are earning over the taxable threshold or get a part time job.
Should you not put a TFN on the account, half the interest earned is sent to the government as 'withholding tax', that can later be claimed back via tax returns.
Generally, accounts for children are opened in the parent name, as trustee… 'Joe & Mary Smith as trustee for Billy Smith'. The parents put their TFNs on the account and any interest the 'child' earns goes towards the taxable income of the parents.
this is how the greater southern bank account works like and you can open its from a childs birth
Generally, accounts for children are opened in the parent name
Nope… Can be in the kids name.
The parents put their TFNs
Nope. Parent TFN not needed. Child can get TFN at any age.
and any interest the 'child' earns goes towards the taxable income of the parents.
Nope. Child can earn income.
3 strikes. You're out…
Should you not put a TFN on the account, half the interest earned is sent to the government as 'withholding tax',
NOT TRUE
You can get a withholding tax exemption…
Please stop with false information…
Just curious on what is minimum age to open bank account for kids?
Any age
How does it work in terms of tax returns?
No tax up to $416, then you need to pay tax…
How much are you expecting this account to earn in interest?