Published by Dental Accounting Group | The Successful Dentist™ | March 2026
The One Big Beautiful Bill Act, signed into law in 2025, introduced the Trump Account — a new tax-deferred savings vehicle designed to encourage long-term wealth building for eligible children across the United States. This new way to approach savings plans is part of broader tax law changes aimed at supporting financial stability and providing a financial head start for the next generation. Here is what dental practice owners and their families need to know.
Key Account Details
| Account Type | Tax-deferred (similar to a traditional IRA and other individual retirement accounts, but specifically structured as a type of account for children under age 18) |
| Who Can Open | Legal guardian, parent, adult sibling, or grandparent — in that order of priority — provided the child has a valid Social Security number |
| Opening Date | Accounts may be opened beginning July 4, 2026, under the Big Beautiful Bill Act |
| Govt. Contribution | $1,000 one-time pilot program contribution for eligible children born January 1, 2025 through December 31, 2028, funded by the federal government |
| Annual Limit | Up to $5,000 per calendar year combined from employers and individuals (no income limits for contributors), including additional contributions from family members |
| Employer Portion | Up to $2,500/year (inflation-adjusted after 2027); excludable from the employee’s gross income |
| Deductible? | No. Individual contributions are non-deductible and are treated as gifts for gift tax purposes under the current tax code |
| Investments | Must be invested in eligible investments such as low-risk U.S. index funds or mutual fund options tied to a stock market index, with attention to expense ratio and long-term investment accounts performance |
| Distributions | Follow traditional IRA and traditional individual retirement account rules after age 18; distributions are taxed as ordinary income above contributed basis, and may be subject to capital gains taxes depending on structure |
| Penalty-Free Use | Education expenses such as college tuition, first home purchase (up to $10K lifetime), birth/adoption (up to $5K), or age 59½+; designed to support a child’s future through the power of compound growth and long-term investment earnings |
Next Steps: What to Do Mid-Year
While Trump Accounts cannot be opened until July 4, 2026, now is the time to prepare for this new savings account structure and evaluate how it fits within broader savings accounts, retirement accounts, and wealth transfer strategies.
- File the appropriate IRS form (Form 4547) with your personal tax return if your child was born between 2025 and 2028 to secure eligibility for the $1,000 government contribution tied to this pilot program.
- Visit www.trumpaccounts.gov to register for email updates and receive notification when the portal is live.
- If you are an employer, evaluate whether to offer a Trump Account program as part of your employee benefits. This requires a separate written plan and must apply to all employees regardless of income or ownership status, similar to other qualified general contributions programs.
- Consider how employer contributions, additional contributions, and long-term annual return assumptions may support your child’s Trump Account and overall financial planning strategy.
- Consult your DAG advisor to determine whether a Trump Account fits within your broader tax planning, Roth IRA conversions, and wealth transfer strategy for your family and future generations.
| Disclaimer: Trump Account rules are still being finalized by the IRS and Treasury. Information in this article is based on the legislation as currently enacted and is subject to change. This is not legal or investment advice. Consult your DAG advisor for personalized guidance specific to your situation. © 2026 DG Accounting Professionals LLC. All Rights Reserved. |
Dental Accounting Group • Bellevue, WA • cpa4dds.com • 425.216.1612
© 2026 DG Accounting Professionals LLC. All Rights Reserved.
