Teaching Tax Flow: The Podcast

In this episode of the Teaching Tax Flow podcast, Chris Picciurro and John Tripolsky host Andrew Wallner, CPA, to decode the complexities surrounding Trump Accounts. This in-depth discussion delves into the intricacies of these newly introduced financial vehicles, shedding light on their structure, eligibility, and potential benefits. Andrew brings his wealth of knowledge to the table, offering listeners valuable insights into effective tax-planning strategies that leverage Trump Accounts for both immediate and long-term advantages.

The episode kicks off with an exploration of the origins and legislative backdrop of Trump Accounts, a tax-efficient investment mechanism birthed from the OB3 (One Big Beautiful Bill Act). Chris and Andrew dissect the intricacies of funding these accounts, potential tax deductions, and the significant role of Form 4547 in account setup. The conversation also navigates the complexities of qualified distributions and how Trump Accounts compare to traditional savings tools like 529 plans. This episode serves as a comprehensive guide for families seeking to optimize their financial planning decisions through strategic use of Trump Accounts.

https://trumpaccounts.gov
https://www.irs.gov/e-services

⸻

EPISODE SPONSOR
REPStracker
https://www.repstracker.com/affiliate/teachingtaxflow (CODE: IFG)

⸻

👉 Spotify https://bit.ly/3KdmtJL
👉 Apple Podcasts https://apple.co/3ZkyEtX
👉 Amazon https://amzn.to/4qmdqa5
👉 iHeart https://bit.ly/iheart-TTF
  • (00:00) - Introduction and Episode Theme
  • (00:27) - Introduction to Trump Accounts
  • (00:56) - Introduction to Guest: Andrew Wallner
  • (02:22) - Background of Andrew Wallner and His Practice
  • (04:12) - Overview of Trump Accounts Features
  • (05:17) - Funding and Growth of Trump Accounts
  • (07:09) - Enrollment Process and Government Programs
  • (11:36) - Details on Trump Accounts vs. Traditional Accounts
  • (12:43) - Distribution Rules and Tax Implications
  • (15:32) - Qualified Distributions
  • (16:46) - Opportunities and Education Through Trump Accounts
  • (18:30) - Conclusion and Future Prospects of Trump Accounts
  • (20:03) - Closing Remarks and Future Discussions

Creators and Guests

Host
Chris Picciurro
Founder, Teaching Tax Flow
Host
John Tripolsky
VP of Marketing, Teaching Tax Flow
Guest
Andrew Wallner, CPA
Tailored Certified Public Accountants, P.C.

What is Teaching Tax Flow: The Podcast?

Welcome to “Teaching Tax Flow: The Podcast”, the show that’s all about demystifying taxes and helping you keep more of your hard-earned income in your pocket.

Hosted by tax experts from the Teaching Tax Flow team, this unfiltered (but clean) podcast is designed to empower you with the knowledge and tools you need to confidently navigate the world of taxes. We’ll cover everything from understanding tax laws and regulations to maximizing deductions and credits.

In each episode, we’ll break down a specific tax-related topic in a clear and accessible way, providing practical tips and strategies you can use to optimize your tax situation. We’ll also answer listener questions, share the mic with amazing guests, and share real-world examples to help illustrate key concepts.

Whether you’re a freelancer, small business owner, real estate investor, or just looking to understand your taxes better, this podcast is for you. So tune in, take notes, and start building your confidence in taxes today.

Produced and hosted by Teaching Tax Flow.
www.TeachingTaxFlow.com

John Tripolsky:

Hey, everybody. Welcome back to the Teaching Tax Flow podcast, episode 194. We are finally, finally gonna touch on a topic, really, I don't know anything about. So I am honestly just gonna shut up for once. Chris, I know you're excited about this.

John Tripolsky:

Our guest is gonna be extremely excited about this because I have my literally, I have a marker. I have a pen. I have my notebook in front of me. I'm ready to start writing this stuff down. We are gonna talk about Trump Accounts.

John Tripolsky:

So totally, I guess, apolitical is probably the best way to put it. We are gonna talk about how these affect people who they apply to, how do you go about them, everything we know about them as of this date, we are gonna dive into it. And our guest, was actually on a news program not too long ago about this. So obviously, we bring in the people that know a lot more than I do naturally. But, Chris, welcome back to your own show, sir.

John Tripolsky:

Give us a little kickoff here and tell us who's gonna talk about this topic with us.

Chris Picciurro, CPA:

Well, I'm really excited about this episode. We've been wanting to tackle Trump accounts for a long time. We know that the o b three, One Big Beautiful Bill Act, was signed into law almost a year ago. In in this year, who two hundred and fiftieth anniversary of our country, July 4 here '20, '26. It's going to be marked with the kind of the I I wouldn't say birth, but the the guidance of Trump Accounts.

Chris Picciurro, CPA:

And we talk about one of the three laws of teaching tax law being tax agencies are are involuntary business partner. Tax laws are written to encourage and discourage certain behavior that could be economic. It could be social. It could be environmental. And this law is no different.

Chris Picciurro, CPA:

This the the birth of Trump Accounts. I'm super excited to have Andrew Wallner, CPA, join us. Andrew and I have known each other for a quite a few years. He is a member of the Michigan Association of CPAs. I consider him a friend.

Chris Picciurro, CPA:

Him and his wife, have an amazing team and run an awesome practice almost to Canada. Way up. If you if you are familiar with Michigan Andrews, you know what a Yooper is. And Andrew brings a wealth of knowledge. So and so we wanna bring him in because he John, you're right.

Chris Picciurro, CPA:

He was just recently on, some local news media there. Talking about Trump Accounts. So, Andrew, welcome to the Teaching Tax Flow podcast.

Andrew Wallner, CPA:

Yeah. Thanks for having me. I'm honored to be on the show here. Met Chris and John a while back at some seminars and really kinda appreciated their insight that they brought. And, you know, getting to see folks like that inspires us to bring more of this information out to the out to the public.

Andrew Wallner, CPA:

You know? And, of course, as Chris mentioned, we are in the Upper Peninsula Of Michigan close to Canada. It'd be a really long swim across Lake Superior to get there, cold swim as well. But, you know, our firm here has been here for quite a few years since the seventies. My wife and I took over majority ownership a few years back and we run about 20 employees strong and big focus on tax planning.

Andrew Wallner, CPA:

Obviously, preparation goes along with that. But these these opportunities, you know, and, like, later on the show as we talk about these Trump accounts and the opportunities that are are there for investment for children and tax deferred savings accounts, you know, these are the things we'd like to bring to our clients to really add value to the tax preparation process, which I think is paramount for firms going forward as you've mentioned in many of your seminars too.

Chris Picciurro, CPA:

Well, if you're watching on YouTube, which you should be, and if you are, definitely subscribe and like and share this. You'd see that Andrew is a young strapping young man, and I bet he could swim across that Lake Superior, or at least he'd jump on a jet ski and try to rip through. Don't know if you'd have enough gas. But but, yeah, we are so let's talk about these Trump accounts because and and, Andrew, this is great because I know you've had some personal experience with these. As CPAs and and you mentioned that your firm is forward focused in my opinion and does value tax planning and strategy.

Chris Picciurro, CPA:

I think a lot of times taxpayers and tax professionals focus way too much on immediate tax deductions and immediate tax savings. Sometimes actually it's not a savings, sometimes it's a deferral. A lot of times, you'll there are opportunities to put money away, what we call our gold diagnosis, tax free income and growth, into May or into into Roth accounts. But those come with different rules where I feel like Trump accounts are, for lack of a better term, nondenominational. And and their the intention is to allow families from all different socioeconomic situations the ability to put money away and see some tax benefits.

Chris Picciurro, CPA:

And and can you, you know, again, give us a idea of of what you're seeing out there and what a Trump account is?

Andrew Wallner, CPA:

Yeah. So a Trump account is essentially a vehicle for children to have money put away for them either by way of their parents putting it away or someone else that that would like to set that aside, grandparents, aunts, uncles, those sorts of things, putting it away while they're within a certain age, and that money can grow tax free, what they're referring to as the growth period, which is all of the years that the child starts the account till they turn age 18. And then at that point when they turn 18, that becomes the child's account. And at that point, it becomes a traditional IRA. So that was a big a big question mark with a lot of people there was that a lot of information about it was gonna be a Roth.

Andrew Wallner, CPA:

It was gonna be this. No. It becomes a traditional IRA, and then it has all of the all of the elements that need to be considered for a child as as a traditional IRA. But what I'm most excited about on this is when we're doing a lot of tax planning with clients at every income level. I mean, I don't care if you got $5,000 or you've got $5,000,000 you should be planning.

Andrew Wallner, CPA:

And a lot of those conversations with people come into the idea of setting money aside for children. And if there's one thing I really don't like is having to file a tax return for a child. And a lot of those grandparents ask about putting money away in and. And although the intention is amazing, I just don't like kiddie tax. I think it's an unnecessary burden that people don't understand, and and it's expensive to prepare tax returns.

Andrew Wallner, CPA:

So I like these, and I'm excited about them because now we can put some money aside for kids, and that money can grow tax free, and it does not have to show up on the tax return. And the kids can't take the money out either. That's the other concern is what if this money goes in and mom or dad or somebody wants to take this money out? You can't get to it till that becomes 18 and it becomes the child's account. And getting this out to everybody, the reason I want to talk about it is I just don't think enough people understand how you get these opened up, how you get them started because it's not an automatic thing.

Andrew Wallner, CPA:

And so you have to have a trusted advisor as a CPA or yourself with enough knowledge to get in, get the amounts, or get the items filed on the return. That way you can get these accounts set up either with the funding that the government will provide or some of the other programs that have popped up along with this. That form has to be filed first.

Chris Picciurro, CPA:

So I wanna touch on something, and then I want and then we'll jump into that funding. What Andrew's talking about with the kiddie taxes, you know, the sometimes in our household, we chuckle and say no no good deed goes unpunished. Right? So sometimes you have benevolent grandparents or uncles, and they put money away into a special type of account for for a child, you know, form trust or Uniform Gift to Minors Act or something like UGMA and and those type of accounts. And it's great because that money is earmarked for the child.

Chris Picciurro, CPA:

But as that money grows and earns dividends and interest, that's all taxable. So you're paying an actual tax on that and also typically at the parent's rate or a higher rate. And then there's another tax as far as compliance. Meaning, you have to pay to to have those tax returns prepared. So you're taking a big chunk out of that growth, where with the Trump account, it's not it's you're not taking you don't have to file a return as long as the money's in there.

Chris Picciurro, CPA:

As Andrew said, it's kinda like an IRA. I wanna talk about distributions in a couple of minutes, but let's talk about funding it, because you're right. There are no income limits. And and this is a fluid situation, right, that we're gonna receive more guidance in the next few months and and and, you know, and then when the then it will up your name, image, and likeness contract to come back on the teaching taxable contract podcast. But you know, so sort of fund it.

Chris Picciurro, CPA:

That's done. I I know that it could be done using I when you have your tax term prepared or separately. But, also, you mentioned something called the pilot program where just like a four zero one k, the government's actually putting a match in there for the first x amount of p, people that form an account.

Andrew Wallner, CPA:

Right. So, namely, the first one that hit everybody with the discussion was if you were a child born 01/01/2025 through December 31. So a brand new child. That child would qualify for the pilot program, which is a $1,000 deposit that would go into this account. To qualify for that, you just have to be born.

Andrew Wallner, CPA:

That's the first thing. But to enroll for it, you must file a form 4,547. The easiest way to do that form is with your CPA preparation of your tax return. It just gets added onto the form and the child gets put on there. So for instance, this year we did quite a few of them as we were educating our clients to do it.

Andrew Wallner, CPA:

Really easy form, you had to pick the person who was gonna be in charge of it, put an email address on there because that's how a lot of the things are gonna come through and then put the child's information, date of birth, those sorts of things. That wasn't just for kids born this year though. Any child under age 18 has to go on that tax form. And furthermore, if you have a new child in future years and you've enrolled once before with other kids, you would have to file a new form 4,547 each year you have a new child. If you enroll and you're not born in those times, there was these other programs that popped up though, like what's called the Dell contribution.

Andrew Wallner, CPA:

And so the Dell family put some money aside, and I think the number is like the first 25,000,000 children or something that enrolled, they would potentially qualify for $250. So if you were born before 01/01/2025 and under age 10, you could potentially get $250 even though you don't get the 1,000 pilot program. But you had to live in a zip code where the average annual income is less than $150,000 So there, again, there's all these rules regulations that you really gotta lean on your CPA to get you through these things. And then how is that gonna get funded? If I'm being completely honest, we have no idea.

Andrew Wallner, CPA:

It's a branding program, but the enrollment has a process that steps through. You'll get an email that will invite you to set this up. And then like myself, you download an app, which I've done, and I got my email. As soon as I got the app, I got the email, you enroll, and then your children pop up on there. There's big fancy pictures that say, get ready.

Andrew Wallner, CPA:

We're we're gonna fund this thing in in the fourth if you wanna do it. But how does that $2.50 show up? How does the thousand? That's gonna be related to treasury, so it's really gonna be on them to to have that money go in there.

Chris Picciurro, CPA:

So just so the it's that form forty five forty seven is how you, that that could be filed with a tax return. But if someone's watching or listening and they said, darn it. My tax return has been prepared. They can go on and file that right through, you know, through the IRS website. They can find that form on

Andrew Wallner, CPA:

IRS avenues on that is that if you download the forty five forty seven, you can mail it in, I believe fax as well. You'll have to follow the instructions that go along with the form. That's obviously gonna be your slowest method because somebody's gonna have to handle it. They're gonna have to process it. And you're mailing a lot of information with social security numbers and such in the mail, which has its own you can go to the only website you should visit regarding the Trump accounts.

Andrew Wallner, CPA:

I think there's gonna be some bad actors out here, so I also wanna caution people, pay attention to the URLs, pay attention to what they're asking you for. But trumpaccounts.gov is the only website people should be looking for information on this, and it steps you through a lot of great information on there. Also, if you've been wise enough to set up an IRS e services account, you can also track the progress of your Trump account enrollment on that website through your IRS account. So again, another really important reason for every taxpayer to set up an IRS account as well. And of course, have to have a husband and a wife to set up their own accounts individually, but you can follow it and file the forms all through those things that you mentioned on the IRS website.

Chris Picciurro, CPA:

Wow. I mean, this and this is nice because it's free money. It's free income and growth. Let's kinda so let's talk. You know, we're talking about funding.

Chris Picciurro, CPA:

I know there are there are limits every year for funding it. I think I wanna say it's, like, $5,000 or there's there's

Andrew Wallner, CPA:

Correct.

Chris Picciurro, CPA:

You you know, which is great. The nice thing about I wanna move over to this this compared to a $5.29, meaning there this gives you this type of account gives you more opportunity to take the money out tax free

Andrew Wallner, CPA:

Yeah.

Chris Picciurro, CPA:

Right down the road. So I've called the and maybe this wasn't the best term, but I called it the Frankenstein account only because, like, it's like it's kinda like a it's kinda like a works kinda like an HSA in some ways, works kinda like a Roth in some ways, a traditional in a five twenty nine. So you don't get a tax deduction when you fund it, but that's okay. The money grows tax deferred and tax free if you take it out as a qualified distribution. And unlike a five twenty nine plan, there are a lot of different types of qualified distributions someone could have.

Chris Picciurro, CPA:

Is

Andrew Wallner, CPA:

that right? One carve out in there that you mentioned about the tax free, you don't get a deduction going in. There's a potential free deduction. I know we're gonna get in the weeds a little bit on this, but some people should be aware that they may start hearing about this from their employers because there is a carve out through the cafeteria plans or section one twenty five plans that if your employer allows this, you could actually defer out of your paycheck up to $2,500 a year, which means you're saving federal, state, Social Security, Medicare, all those things. So it could go in pretax, and then the employer could fund that into your Trump account.

Andrew Wallner, CPA:

Now if you're under 18, don't get to fund your own Trump account using a Cavagitri plan, but I don't know how many, you know, 18 year olds are worried about tax deductions at that time. So there is one carve out that you can get that money in tax free, and I think some employers might start to jump on that once it becomes more more information available. But then of course, back to the distribution standpoint, like you said, the money goes in up to 5,000 a year in total, all contributions can go into these plans. So if the government gives you a thousand and you decide to do a piece with the employer, you're up to 3,500, you could fund 1,500 more of your own money out there, but it can only be $5,000 per account per year. And the 2,500 is per employee per year.

Andrew Wallner, CPA:

Right.

Chris Picciurro, CPA:

And let's say someone is a child's 18 now down the road. I know, you know, you've you've taken advantage of Trump accounts as well. And let's say they have $30,000 in their Trump account. They can utilize that tax free. They could take tax free distributions if they take money for a qualified distribution.

Chris Picciurro, CPA:

Types of what do we think is gonna be a qualified distribution?

Andrew Wallner, CPA:

Well, so potentially out of there, it will become a traditional IRA, so there will be tax considered in there. Right? So those are the things that once you get to that point, a distribution will be taxable out of there because it will become a traditional IRA. I've not gotten into the weeds to see if there's some carve outs with the Trump accounts. If you've seen something, again, information is coming brand new to this as we go.

Andrew Wallner, CPA:

Understanding is that all of these distributions later on down the road will have some taxable items in there. But it opens up a lot of things for these kids that if you funded it to the fullest extent and that child's got a bucket of money, the child could take it out to buy their first home. They could claim, you know, no penalty on it. They could do a Roth conversion if they're in a low tax bracket and it makes sense to do tax planning with them. They could do a Roth conversion if you're steering that child through there.

Andrew Wallner, CPA:

They could take it out like a five twenty nine, like you mentioned, for educational purposes. Of course, it will be taxable. It will not have penalties so long as it's used for education purposes. But again, if the child's not working that much, it's a pretty low tax bracket. But, you know, again, we get into IRA distributions.

Andrew Wallner, CPA:

You gotta consider a little bit of kiddie tax concerns on that too. Like Alright.

Ad Read:

This podcast is sponsored by Reps Tracker. Are you a real estate investor who is bogged down with the huge tax burden? Real estate investing can open the door to powerful tax benefits. Reps Tracker can streamline the process of accelerating these opportunities. To take advantage of a special TTF community discount, go to teachingtaxflow.com backslash reps, r e p s, and use the code I f g. Better yet, click on the link below in this episode's show notes to go directly to the reps tracker sign up page.

Chris Picciurro, CPA:

But if a child takes it out for education at age 19, you've gotta assume that their marginal tax rate if they're in college is almost nothing. I mean, there it's gonna be small. Much less than the parents.

Andrew Wallner, CPA:

And if you take out enough and that provided more than half of their own support could get a claim themselves as a dependent and then get the education credit and not pay any income taxes because the parents don't get an education credit. So, again, I'm I'm I'm, like, frothing at the mouth how cool these opportunities are gonna be down the road.

Chris Picciurro, CPA:

Definitely an opportunity. And and and one of the things we talked about before we recorded was I I like that this gives an opportunity for families that have that really didn't have exposure to investments. Like, I didn't know what a mutual fund was or a stock was or anything until I really got into the, quote unquote, into my early twenties and and in my first four zero one k. So I think that the opportunity for any type of household, no matter what your situation is, this has an opportunity to take advantage of this. So it's not income dependent.

Chris Picciurro, CPA:

It's not phased out. It's it's really you know, and and it's kinda cool that once these accounts are set up, I think for kids to watch them and maybe see them grow a little bit too.

Andrew Wallner, CPA:

Right. And and, again, at at our firm at Tailored CPAs, you know, we believe in planning at all income levels, and we get so many questions about these investments that this is a great vehicle to teach a young child at a young age what what stocks are, how these mutual funds work, those sorts of things. And what is neat about these programs is that, you know, you're going to have to lean on a tax adviser to help you get these forms filled out if you're not comfortable with it. But then these are gonna sit in the background in low cost ETFs, so you're not gonna have you're not gonna have a big chunk of fee going out as the investments are rolling. So it's got a better opportunity.

Andrew Wallner, CPA:

Now it looks like the app is showing that they're gonna partner with Robinhood. That's one of the the names on the app at this point in time. So what that mechanism will be monthly statements to monitor, I don't really know. I have to assume it's gonna be invested in, a target fund where, like, the child is zero now. At 18, maybe it scales the investments in whatever it does.

Andrew Wallner, CPA:

But, again, the child is gonna learn compounding interest. And I think that is phenomenal for anybody to teach their children how money works and how it can really incentivize their their long term lifetime goals.

Chris Picciurro, CPA:

Well, we couldn't thank can't thank you enough. This has been great. I've learned things. I know John's learned some things. Our our community is gonna be thankful, and we once we get some more clarity, I think it's gonna come through in the summer.

Chris Picciurro, CPA:

You know, I'll be seeing you in about a month anyway. Maybe we'll John and I will buy you a beer and convince you to come back on the show.

Andrew Wallner, CPA:

Yeah. July 4, these are apparently open for funding and, interesting. I don't think there's any banks open that day, but I guess when after the parade, you can go in and open your app and get the money moving. So Thank you, guys.

Chris Picciurro, CPA:

I'm happy to

John Tripolsky:

go. Absolutely. It was it was good seeing you again. Good chatting. As everybody who hopefully chimed at the beginning of this, I actually held my promise, and I shut up the entire episode.

John Tripolsky:

So my wife would be happy because she says it never happens, but it it did. And Andrew, I just wanna I wanna say one thing or re reiterate one thing that you said that I think was super important. I don't know if you even realize that you said this. You know, you talked about how that example you talked about, the education credit, etcetera, and kinda, you know, showed it your you know, audibly, showed how all these things could turn into something else, but you ended with I don't know if you said it verbatim, but that really is tax planning as a whole. So this is super important, and I love that.

John Tripolsky:

I wouldn't call it forced financial education with people, but it is a little bit, which I think a lot of people lack. Right? It kinda maybe pushes things to the side of saying, oh, I wish I would have done something earlier. Well, here's a chance possibly for a lot of people. So I look forward to it.

John Tripolsky:

I'm glad that we edit these podcasts in house because now I have to go back and listen to this thing a couple times and actually then I'll take my notes. So I appreciate it, man. And, as Chris mentioned, we're definitely gonna have you back because, obviously, we got a new news being released on these. So it'll be there. We'll be here.

John Tripolsky:

We're gonna convince you to come back and join us too, man. So we appreciate it.

Andrew Wallner, CPA:

Yeah. I look forward to it.

John Tripolsky:

Awesome, gentlemen. Well, thank you for hosting this podcast without me. So this was great. You didn't need me. And anybody who's listening, watching this again, make sure you subscribe to the YouTube channel.

John Tripolsky:

You'll get all those notifications as well specifically on this topic. You can actually search on this channel to put in Trump accounts here in a month or a couple weeks, and as we release new stuff too, you'll get it straight from the channel. So check it out everybody, and you have a great, great week here as we venture into that. Was it two hundred and fifty years of the existence here? Well, legal existence, we'll say, of The US, and have a great week.

John Tripolsky:

We'll see everybody back here again next week on the Teaching Taxable Podcast. See you pretty soon.

Disclosure:

The information in this podcast is educational and general in nature. It reflects the opinions of teaching tax flow and does not take into consideration the viewer's personal circumstances. It is not intended to be a substitute for individualized financial, legal, or tax advice. Consult the appropriate qualified professional prior to making any decisions. Securities are offered and supervised through Cabin Securities Inc member, FINRA SIPC.

Disclosure:

Investment advisory services are offered and supervised through Cabin Advisors LLC, an SEC registered investment advisor. Chris Picciurro is a registered representative of Cabin Securities and an investment advisor representative with Cabin Advisors LLC. Teaching Tax Flow is an independent entity and is not affiliated with Cabin Securities or Cabin Advisors.