Tax Credit Potential Payment
February 4th, 2010
Question: What is the best way to set up payment accounts for loved ones?
I have a few brothers that I want to set up a bank account for, so that they can draw from it as needed.
I have a few needs:
1. Cover potential liability reasons (if one of them were to clear out the account(s) or drastically overdraw the account(s), I need to be protected). Would debit cards be better for this?
2. Need a way to check on account, probably online
3. Ideally, a way to auto-refill the account every month
4. Ideally, a personal inscription, eg “The Family” under the brother’s name on the card.
I think I have a few options:
1. Set up an LLC and set up a small biz account that way. But I’m afraid of the costs, and I have no idea what the tax implications are. Literally, all I’ll be doing is to fund the account for these guys, who will withdraw from it.
2. Just set them up as additional users on my credit card, but a) if they overdraw, I have to pay fees, b) there’s a delay for charges.Are there banks (online?) who offer free additional users on debit cards?
Answer: Why?
The easiest thing (with the least liability for you) is to just send them a check each month or deposit it directly into their account.
Or, you can give them a pre-paid credit card each month.
But seriously, you aren’t doing them any favors. From what you’ve written it sounds like they’re irresponsible. The best thing you could do would be to teach them to be responsible, not fund their problems. Do you plan on supporting them until they die?
As far as your options:
1: this is not a business so an LLC doesn’t make sense.
2: only do this if you’re willing to have them run up thousands in debt and you have the means to pay if off.I really can’t stress enough what a bad idea I think this is. Eventually they need to act like adults. Better to help them now than wait until things come to a head.
Good luck!
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2010 Homebuyer Tax Credit
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