1st Action Tax & Advisory

🚨 NEW TAX UPDATE FOR PARENTS & FUTURE GENERATIONS 🚨

The IRS released proposed regulations last week regarding the new “Trump Accounts” — officially referred to as MAGA Accounts — a new type of children’s investment account designed to help families build long-term wealth for kids. 👶💰

Here’s what we know so far:

✔️ Eligible children born between Jan. 1, 2025 – Dec. 31, 2028 may receive a $1,000 government seed deposit
✔️ Parents, relatives, and even employers may contribute up to $5,000 annually
✔️ Funds can reportedly be invested into U.S.-listed stocks, bonds, and approved index funds
✔️ Structure appears to resemble a hybrid between a Roth IRA and a 529 plan

⚠️ IMPORTANT:
These are currently PROPOSED regulations — meaning final rules regarding distributions, penalties, withdrawals, and long-term tax treatment are still being developed.

However, one thing is certain:
Parents and business owners are going to start asking questions… and planning ahead now could matter later.

This could become a major future planning tool for families looking to build generational wealth and teach financial literacy early.

As additional guidance is released, staying informed will be critical. Always review new tax programs carefully before making financial decisions.

📍Need help navigating tax planning strategies for your family or business?

Contact
📞 210-888-7500

🤩It’s not too early to start planning for next year: Check withholding now

Even though the tax filing deadline for tax year 2025 passed a couple weeks ago, it’s not too early to start planning for next filing season. Planning now can help avoid surprises next year. One action that can be taken is checking for proper tax withholding.

-What is withholding?
Taxpayers need to pay their tax as they receive their income, and they do this through withholding. For employees, “withholding” refers to the federal income tax portion of each paycheck that an employer takes out for tax purposes. It can also be the amount from earnings self-employed people and others voluntarily set aside to pay their estimated taxes.

-How taxpayers can check their withholding
The IRS Tax Withholding Estimator is a free, easy-to-use tool that helps workers and retirees estimate the amount of federal income tax to withhold from their paychecks now for the taxes they will owe next year.

The estimator reflects the changes to credits and deductions under the One, Big, Beautiful Bill. This includes the deductions for tips, overtime, car loan interest and enhanced deduction for seniors. It also accounts for updates tied to family-related credits, homeownership, and charitable giving.

-What are the benefits of using the IRS Tax Withholding Estimator?
By using the estimator, taxpayers can manage their estimates based on any personal life change, such as buying a home, changing jobs, having a child or changing their marital status.

For people who recently completed their 2025 tax return, the IRS a-dvises using the IRS Tax Withholding Estimator to consider all income sources such as full-time wages, side jobs and any sale of services or goods.

By adjusting tax withholding, taxpayers can:

Prevent owing money and potential penalties at tax time
Adjust withholding to increase take-home pay instead of waiting for a refund

-What else taxpayers need
For an effective tax withholding estimate, taxpayers will need certain documents including:

*All income statements, including their spouse’s if filing jointly
*Data from other sources of earnings
*Their most recent income tax return

More information

Publication 505, Tax Withholding and Estimated Tax
Tax Withholding Estimator FAQs (resources - IRS Tax Tip) irs.gov

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