Coauthored By: Allie Powell, CPA & Drew Malone, CFP®, CPA
Trump Accounts are a new type of tax-advantaged savings account for children under 18 with a valid Social Security number, created under the One Big Beautiful Bill (OB3) signed into law on July 4, 2025 with accounts available on July 4, 2026. Children born between January 1, 2025, and December 31, 2028, receive a one-time $1,000 federal seed deposit from the U.S. Treasury. Families and employers can contribute up to $5,000 annually. Accounts must be invested in U.S. stock index funds, and when a child turns 18, the account automatically converts to a traditional IRA with standard withdrawal options.
A new federally backed savings account has arrived for American families, and if you have young children, it’s worth understanding.
Trump Accounts, established under the One Big Beautiful Bill (OB3) and signed into law on July 4, 2025, are designed to give children a financial head start from birth. With a $1,000 government seed contribution, annual contribution limits, and a clear path to a traditional IRA at adulthood, these accounts introduce a new variable into family financial planning.
We’ve broken down what Trump Accounts are, how they work, and how they stack up against the 529 plan many families already leverage.
A Trump Account is a new type of individual retirement account (IRA) created specifically for children under the age of 18 who have a valid Social Security number. There are no income restrictions to open one, making these accounts accessible to a wide range of families.
The accounts were established under Section 530A of the Internal Revenue Code as part of the OB3 Act of 2025. Their primary purpose is to encourage long-term wealth-building from early childhood, with funds invested in U.S. stock index funds throughout the child’s minor years.
One important note: an existing IRA cannot be converted into a Trump Account. The account must be established fresh and titled specifically as a Trump Account by a financial institution.
For children born between January 1, 2025, and December 31, 2028, the U.S. Treasury will deposit a one-time $1,000 pilot program contribution directly into the child’s Trump Account. This money is not paid directly to the family. Instead, it is treated as a tax overpayment refunded into the account and is protected from certain offsets.
Children born before 2025 and under the age of 18 are still eligible to open a Trump Account but will not receive the $1,000 government deposit.
Beyond the government seed money, families, individuals, and employers can all contribute.
Here’s how the limits break down:
The employer contribution is particularly valuable because it is not counted as taxable income for the employee. If your employer offers it, you should take it! That’s free money compounding on your child’s behalf.
During the growth period, while the child is a minor, funds held in a Trump Account must be invested in eligible U.S. stock index funds, such as those tracking the S&P 500.
This is not a flexible brokerage account; investment options are limited by law during this phase.
Taxes around Trump Accounts are important to keep in mind. Check out these rules to keep your finances in order.
Contributions made by parents, guardians, or other individuals are made with after-tax dollars and are not tax-deductible. That means they do not reduce your taxable income in the year you contribute.
However, because these contributions are made with money you’ve already paid tax on, they create what’s called tax basis in the account.
When the child eventually withdraws those contributed amounts, that portion comes out tax-free. The earnings on those contributions, however, are subject to income tax and, depending on when and how funds are taken out, potentially an early withdrawal penalty.
Employer contributions function differently because they are not taxable to the employee when made. When withdrawn later, employer contributions and their earnings are subject to standard income tax, similar to a traditional pre-tax retirement account.
While the child is a minor (ages 0-18), distributions from a Trump Account are generally not allowed, with limited exceptions for qualified rollovers, excess contributions, and death of the account beneficiary. This is an important distinction from other savings vehicles, such as 529 plans, which allow more flexible access to qualified education expenses during childhood.
On December 31st of the year before the child turns 18, the Trump Account officially converts to a traditional IRA. At that point, standard IRA rules apply, including the 10% early withdrawal penalty for distributions, unless an exception applies.
Some exceptions to the 10% early withdrawal penalty include the following, but note that ordinary income tax still applies to these distributions:
This means a child who saves consistently in a Trump Account from birth through age 18 could use those funds toward college, a first home, or eventually retirement—all with favorable tax treatment on the contributed portion. One of the Trump Account’s unique benefits is that although it follows traditional IRA rules and provides tax-deferred growth, contributions made during the growth period (ages 0–18) are tax-free upon withdrawal. For more on how Roth and traditional IRA strategies fit into your family’s broader plan, read our guide to the Roth IRA.
If you make after-tax contributions to a Trump Account, be sure to work with a CPA and track those contributions carefully using IRS Form 8606. This form establishes your tax basis and ensures that contributed amounts are not taxed again upon withdrawal.
For many families, the natural question is: how does a Trump Account compare to a 529 plan, and should I use one instead of the other?
The short answer is that they serve different purposes and can work well together. Here’s a breakdown of each.
A 529 is a tax-advantaged savings account designed primarily for education costs. Contributions are made with after-tax dollars, and the account grows tax-deferred. Withdrawals are tax-free when used for qualified education expenses.
Key features include:
Trump Accounts are better understood as a long-term wealth-building tool that begins in childhood. They are not designed primarily for education, and access before adulthood is limited.
Key features include:
If your primary goal is saving for education costs, a 529 plan remains a strong and flexible choice, particularly given the Roth IRA rollover option for unused funds and its broader investment menu.
If your goal is long-term wealth-building, a Trump Account offers a compelling head start, especially when the $1,000 federal seed and employer contributions are factored in.
For many families, especially those with children born between 2025 and 2028, the right answer may be both.
Before opening a Trump Account or adjusting your savings strategy, a few practical items are worth keeping in mind:
Our team works with families and individuals to build plans that account for education savings, retirement readiness, and generational wealth.
Trump Accounts represent a genuinely new option in the family financial planning toolkit. The combination of a federal seed contribution, employer contribution benefits, and a clear long-term wealth-building structure makes them worth understanding, even if the regulations are still taking shape.
The most important decision is simply to start. Whether through a Trump Account, a 529, or both, building the habit of saving early on your child’s behalf is the highest-impact move available to you right now.
If you’re not sure where Trump Accounts fit into your overall financial plan, a conversation with an advisor can help clarify the tradeoffs. The BIP Wealth team is here to help you make the right decision. Contact us today to learn more about how these accounts could work for your family.
Trump Accounts are a new type of individual retirement account for children under 18 with a valid Social Security number, established under the One Big Beautiful Bill Act signed into law on July 4, 2025. They are designed to help families build long-term wealth, with a one-time $1,000 federal deposit for qualifying children born between 2025 and 2028, annual contributions of up to $5,000, and mandatory investment in U.S. stock index funds. At age 18, the account converts to a traditional IRA.
Parents or guardians can open a Trump Account by filing IRS Form 4547 along with their federal tax return. An online application tool is expected to go live at trumpaccounts.gov. A financial institution will receive the funds and activate the account. Only one Trump Account can be established per child, and it must be titled specifically as a Trump Account. Existing IRAs cannot be converted.
Accounts can be opened in 2026 by filing IRS Form 4547 with your 2025 tax return. Contributions from individuals and families cannot begin until July 4, 2026. The $1,000 federal seed contribution will be deposited by the Treasury for eligible children once the account is established.
Any child under 18 with a valid Social Security number qualifies to open a Trump Account. There are no income restrictions. The one-time $1,000 federal seed contribution is available for children who are U.S. citizens born between January 1, 2025, and December 31, 2028. Children born before 2025 can still open and benefit from a Trump Account, but will not receive the $1,000 government deposit.
This article is intended for informational purposes only and does not constitute legal, tax, or investment advice. Investors should seek tax advice based on their particular circumstances from an independent tax advisor, as tax laws are subject to interpretation, legislative change and unique to every specific taxpayer’s particular set of facts and circumstances.
Copyright 2026 BIP Wealth. All rights reserved.
If you filed your Georgia taxes before Governor Kemp signed HB 1199 into law, you may need to file an amended return. Here’s what happened and what to do next.
Earlier this week, Governor Kemp signed the Georgia Conformity Bill (HB 1199) into law—and if you’re a Georgia taxpayer, it’s worth a few minutes of your time to understand what it means.
This legislation updates Georgia tax law to align with the federal One Big Beautiful Bill Act (OB3) in most areas. But here’s the important part: Georgia chose not to conform on a couple of key provisions, and those differences could affect your state tax return.
At the federal level, the OB3 raised the State and Local Tax (SALT) deduction cap to $40,000. Georgia, however, voted not to follow suit. The state’s SALT limitation will remain at $10,000.
What does that mean in practice? If you itemized your deductions and included more than $10,000 in state and local taxes—think income tax withholding, property taxes, and ad valorem taxes paid to Georgia or other states—you may need to amend your Georgia return to reduce those itemized deductions back to the $10,000 state maximum.
The federal OB3 introduced provisions eliminating taxes on tips and overtime pay. Georgia also chose not to adopt these. State lawmakers indicated that these policies would require separate legislation, given the significant fiscal implications involved.
So, if you took either of those deductions on your federal return, you may need to file an amended Georgia return adding that income back for state purposes.
The good news? Most self-preparation tax software platforms are already aware of these changes. Some platforms, such as TurboTax have begun notifying affected users directly, and in many cases, amending a return through these platforms can take less than 15 minutes.
If you work with a CPA, I’d encourage you to reach out to your preparer to ask whether your return may need to be amended in light of HB 1199.
The Georgia Department of Revenue has made its position clear: returns filed incorrectly will be expected to be amended. While no formal penalty or interest relief has been announced, a waiver can always be requested. That said, returns amended prior to the April 15th deadline—with any additional tax paid—would generally not be subject to additional penalties or interest.
The bottom line: if this applies to you, it’s worth acting sooner rather than later.
If you have questions about how the Georgia Conformity Bill may affect your specific situation, please don’t hesitate to reach out to our team. At BIP Wealth, we work closely with our clients and their tax professionals to stay ahead of changes like these so you can focus on what matters most.
This content is general in nature and is for informational purposes only. It is not intended as tax advice and should not be relied upon as such. Individual circumstances vary, and taxpayers should consult with their own tax professional before taking action. BIP Wealth, LLC is a registered investment adviser (RIA). Registration does not imply a certain level of skill or training.
Charitable giving is more than a tax deduction strategy for individuals and families. Often, charitable giving reflects personal values, supports causes that matter, and, when planned intentionally, creates valuable tax benefits. This year, that last piece carries more weight than usual. With several Trump tax law changes taking effect on January 1, 2026, donors have a short window to make the most of the charitable giving tax deduction under today’s more favorable rules.
Beginning next year, new limits will reduce how much of your charitable giving can be itemized. For many people who give consistently, 2025 is the ideal time to accelerate or “front-load” gifts before the rules shift. These changes were introduced as part of the recent tax package in the One Big Beautiful Bill, and understanding them can help you make more informed decisions about your philanthropy.
With the current rules in place through the end of this year, donors can still take advantage of today’s full charitable giving tax deduction structure. Contributions to qualified charitable organizations may be deducted from your taxable income, subject to charitable giving tax deduction limits based on both what you give and how you give it.
Under existing IRS rules:
This year’s guidelines remain predictable and relatively generous, which is what makes this year such a valuable planning year for those who want to minimize their tax bill. With several shifts coming soon, it’s worth considering how charitable decisions align with your broader tax planning strategy before the landscape changes.
Starting January 1, 2026, several adjustments will affect charitable giving deductions. While the charitable deduction itself isn’t disappearing, the value of those deductions may decrease unless giving is planned with the new rules in mind.
Here are the key changes happening to charitable giving tax deductions in 2026:
Beginning in 2026, charitable deductions will only apply to amounts above a 0.5% AGI floor. A portion of your giving simply won’t count toward itemized deductions.
Taxpayers in the top bracket will see a reduction of 2% applied to all itemized deductions, effectively amounting to a 5.4% reduction (2% / 37%). This is small on paper but meaningful for larger gifts. The net effect here is that itemized deductions will count as a 35% reduction, instead of 37%.
With fewer itemized deductions available, more people may find they don’t exceed the standard deduction at all, reducing the tax value of charitable contributions starting in 2026.
Because of these shifts, donors who give annually, or who plan multi-year philanthropic commitments, are choosing to “front-load” contributions this year. The goal isn’t to change what you give, but when you give it, allowing you to maximize the charitable giving tax deduction while it’s still fully available.
Here are a few of the most common reasons people are choosing to act now:
“Bunching” multiple years of charitable donations into 2025 helps make sure that total itemized deductions exceed the standard deduction, leading to greater tax savings.
Any gift made in 2025 avoids the upcoming AGI floor entirely, meaning your full donation is deductible (subject to existing charitable giving tax deduction limits).
Since the reduction in itemized deductions doesn’t begin until 2026, gifts made this year retain their full value.
A donor-advised fund (DAF) allows you to take a full deduction this year, then recommend grants to charities gradually in the years ahead. It’s a popular strategy for those who want flexibility without sacrificing tax efficiency.
Your ideal charitable approach depends on your goals, the assets you hold, and how you prefer to support the organizations you care about. These are the strategies many donors evaluate when considering how to maximize the charitable giving tax deduction.
Cash donations remain the simplest and most flexible method of giving. They also allow the highest AGI deduction limit, which is helpful when planning around a single high-impact tax year.
Gifting appreciated stock, real estate, or business interests allows you to deduct the fair market value of the asset and avoid capital gains tax. This approach can also reduce exposure to concentrated positions, which is something often discussed when reviewing overall financial plan risks.
DAFs offer an immediate deduction paired with long-term flexibility. Donors can contribute now and distribute grants at any time in the future. You can gift either cash or appreciated stock. Also, the funds retained in this account are subject to market appreciation, meaning potentially more money that can be given to charity. It’s important to note that these funds must go to a public 501c3 nonprofit organization and are not able to be contributed to any private foundations.
Charitable remainder trusts (CRTs) and charitable lead trusts (CLTs) can support multi-year philanthropic goals, provide income streams, and contribute to estate planning. These strategies often appear alongside broader estate planning considerations.
Regardless of the method you choose, the IRS has clear requirements for claiming the charitable giving tax deduction:
These rules are expected to stay consistent even as other Trump tax law changes take effect.
As you consider whether to act now, you may want to reflect on:
Charitable giving often intersects with broader financial planning, and coordinating those pieces thoughtfully can help you make the most of this unusual year.
With several charitable giving deductions starting in 2026 poised to reduce how much of your donations can be itemized, this year stands out as a meaningful planning opportunity. Whether you’re accelerating your usual annual giving, donating appreciated assets, or funding a DAF, this year offers more favorable conditions for maximizing the charitable giving tax deduction.
To explore which strategies may be right for you, you can connect with a BIP advisor anytime through our contact page.
The answer depends on the type of asset and your AGI. Cash gifts are generally deductible up to 60% of AGI, while appreciated assets typically fall around 30%, subject to IRS rules and charitable giving tax deduction limits.
The charitable giving tax deduction reduces taxable income for donors who itemize. When you give to qualified nonprofits, the value of your gift may be deducted from your income, assuming documentation requirements are met.
Yes—most contributions to qualified 501(c)(3) organizations are tax-deductible, though rules vary based on asset type and annual income limits.
This article is intended for informational purposes only and does not constitute legal, tax, or investment advice. Investors should seek tax advice based on their particular circumstances from an independent tax advisor as tax laws are subject to interpretation, legislative change and unique to every specific taxpayer’s particular set of facts and circumstances.
