Trump Accounts: What Small Business Owners Need to Know About This New Tax-Free Investment Tool for Kids
By: Jose Diaz Caro
Small business owners are always looking for smart, legal ways to reduce tax liabilities, invest in their families’ futures, and build generational wealth. A new IRS-backed savings tool, the Trump Account, offers exactly that opportunity.
If you're a business owner, parent, or grandparent looking to secure your child’s financial future while staying tax-savvy, here's what you need to know.
What Is a Trump Account?
A Trump Account is a new type of traditional Individual Retirement Account (IRA) created under the Working Families Tax Cuts legislation. It is designed exclusively for children under 18, with contributions starting July 4, 2026. The federal government is also offering a $1,000 pilot program contribution for qualifying children.
How It Works for Small Business Owners
As a small business owner, you have a unique advantage. Not only can you set up Trump Accounts for your children, but you can also make employer contributions of up to $2,500 per child, per year. These contributions are excluded from your taxable income and count toward the account’s $5,000 annual limit.
These accounts must be invested in mutual funds or ETFs that track U.S. equity indexes like the S&P 500. The funds cannot be accessed until the child turns 18, at which point the account is treated as a traditional IRA.
Why This Matters to You and Your Family
Here is how this new tax tool could align with your financial goals:
✅ Tax Strategy: Contributions reduce taxable income and grow tax-deferred, especially when combined with other proactive tax planning strategies.
✅ Generational Wealth: This is a long-term vehicle that helps set your children up for financial independence and teaches them early about investing.
✅ Strategic Payroll Integration: Pairing Trump Accounts with your payroll and bookkeeping services keeps your business and family finances aligned.
✅ No Hassle Compliance: As your accounting partner, we will help you manage Form 4547 and integrate it with your monthly accounting services.
Who Qualifies?
Your child qualifies for a Trump Account if:
They are under 18 in the year the account is opened
They are a U.S. citizen with a valid Social Security number
They are born between January 1, 2025, and December 31, 2028, to receive the $1,000 pilot program contribution
You are a parent, guardian, grandparent, or authorized adult willing to act as the responsible party
Why We’re Talking About This Now
Even though contributions begin in July 2026, Form 4547 is already available in draft, and the IRS is preparing for launch. At Caro & Associates, we stay ahead of regulatory changes. Just as we help clients with bookkeeping, payroll, tax planning, and consulting, we are now preparing to guide families in using Trump Accounts strategically.
How We Can Help
As your dedicated small business accounting team, we will:
Help you file Form 4547 to elect your child’s Trump Account
Create a contribution plan using business income
Align it with your personal tax and retirement planning
This is a strong opportunity to invest in your family’s future while keeping your business financially smart.
Take the Next Step
Book a free Discovery Call to learn how Trump Accounts and our full-service accounting can support your business and your children.