Latest news with #MarisaCalderon
Yahoo
22-05-2025
- Business
- Yahoo
Savings accounts for babies in One, Big Beautiful Bill really are beautiful, experts say
Start early and take advantage of compound growth is the mantra of almost every financial adviser. That's why the new savings account for children included in the One, Big, Beautiful Bill , with a one-time deposit of $1,000 from the federal government, is truly beautiful to the investment community. The "proposal reflects a growing consensus: investing early in every child's future is a smart and necessary step," said Marisa Calderon, president and chief executive of Prosperity Now, a national nonprofit organization focused on expanding economic opportunity for low-income families and communities in the United States. Originally called the Money Account for Growth and Advancement, or MAGA Account, but changed last night by the House to the Trump Account, would create a federally funded savings account with a $1,000 deposit for children born between Jan. 1, 2025 and Jan. 1, 2029. Parents also could contribute up to $5,000 annually to the tax-deferred account to be invested in a diversified fund that tracks a U.S.-stock index. Qualified withdrawals, including for education expenses or credentials, a down payment on a first home or as capital to start a small business, are taxed at the long-term capital-gains rate. There are no income requirements and everyone is eligible, as long as the child is a U.S. citizen, and both parents have Social Security numbers. Sen. Ted Cruz (R-Texas), who proposed the savings account initiative, has said for those who don't own any stocks or bonds, these accounts will give everyone a stake. By saving early, the invested money has time to grow. "Research shows that lasting change comes from scale," Calderon said. "Deposits must grow over time and be available when they matter most, such as paying for college, starting a business, or buying a first home." After 25 years, $1,000 invested in the S&P 500 would grow to approximately $10,835, for example. The average stock market return is about 10% per yearfor nearly the last century, as measured by the S&P 500 index. The Trump account isn't a new idea, but it's a new move for the federal government if it passes into law. The enormous tax bill still needs approval from the Senate, which may demand changes before passage. About seven years ago, Sen. Cory Booker (D-New Jersey) proposed a savings account dubbed 'baby bonds,' with $1,000 seed money for newborns based on family income, with potentially larger initial deposits for lower-income families. The proposal never gained bipartisan traction and died. However, the intent of these savings accounts are the same: "Giving children a financial foundation from birth," Calderon said. Some states like Connecticut and Iowa have baby bond programs, which are publicly funded child trust accounts and all have different rules and amounts. Connecticut, for example, only offers its program to babies whose birth was covered by the state Medicaid program and invests $3,200 once at the start. Iowa funds its account with $500 initially and then annually up to 18 years. Some cities have also launched programs that offer seed money to kids in kindergarten to be used for college. HOPE Child Savings Account Program in Atlanta, Georgia launched in May 2022 and San Francisco's Kindergarten to College (K2C) program kicked off in 2011 and sent its first students to college in 2023. A child with a college savings account, no matter the dollar amount in it, is 6 times more likely to go to college, according to a Center for Social Development study. The children are also 4 times more likely to graduate. That's because psychological benefits are associated with having a college fund. Just having the fund establishes a belief that college is possible and an expectation that the child is going to college. "We've long supported this kind of forward-looking policy because we know what works, and because a child's financial future shouldn't be determined by the zip code they're born into," Calderon said. "We are encouraged to see lawmakers taking steps to reflect the principles of baby bonds." Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@ and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday. This article originally appeared on USA TODAY: Trump Accounts seen as a 'beautiful' thing for kids in giant tax bill Sign in to access your portfolio
Associated Press
11-04-2025
- Business
- Associated Press
Prosperity Now and Wells Fargo Foundation Award $200,000 to 15 Organizations Expanding Access to Free Tax Preparation Services
WASHINGTON, April 11, 2025 /3BL/ - Each year, a significant share of eligible taxpayers do not claim tax credits like the Earned Income Tax Credit (EITC), leaving billions of dollars on the table. In 2021, 22% of eligible households did not receive the EITC, resulting in approximately $8.2 billion in unclaimed refunds. That represents not only missed opportunities for families to strengthen their financial position, but also for communities to benefit from greater local spending and economic activity. To help address this gap, Prosperity Now, in collaboration with the Wells Fargo Foundation, has awarded $200,000 to 15 community-based organizations through the 2025 VITA Support Fund [see full list below]. These organizations provide no-cost, IRS-certified Volunteer Income Tax Assistance (VITA) services in 12 U.S. markets, ensuring eligible taxpayers can confidently file their returns and claim the full range of refundable credits, including the EITC and the Child Tax Credit (CTC). Tax preparation services can be costly, with the average price of a basic return nearing $400 for households earning between $20,000 and $60,000 annually. For families already balancing tight budgets, that price tag is out of reach. VITA programs remove that barrier, offering no-cost and accurate filing in trusted, community-based settings. The selected organizations have a strong record of delivering high-quality services with cultural and community awareness at the center. They are expected to prepare over 20,000 tax returns this year, returning an estimated $25 million in refunds and credits to households who earned them. Many also provide year-round support through financial coaching, connections to safe banking options, and help navigating public benefit programs. 'No one should miss out on tax credits they've earned because they can't afford help filing,' said Marisa Calderon, President & CEO of Prosperity Now. 'When we support community-based tax preparation, we're not only helping families strengthen their financial footing, but we're also keeping dollars circulating in local economies where they can do the most good.' 'Wells Fargo is committed to helping people achieve economic mobility, and one of the first steps is making sure they receive all the money they have earned,' said Bonnie Wallace, head of financial health philanthropy at Wells Fargo. 'Supporting VITA programs is an important way we can make a difference on people's path to financial security.' The VITA Support Fund reflects Prosperity Now and the Wells Fargo Foundation's shared commitment to expanding financial opportunity through trusted community partnerships. Meet the 2025 VITA Support Fund Grantees About the VITA Support Fund The VITA Support Fund aims to close the gap in tax filing support by investing in organizations that are deeply rooted in the communities they serve. This year's grantees bring language access, cultural relevance, and personalized support to individuals and families who might otherwise face barriers to receiving their full tax refund. The cohort includes trusted partners with strong local ties and organizations expanding their reach through volunteer training, digital tools, and partnerships with schools, faith communities, and service providers. About Prosperity Now Since 1979, Prosperity Now has been a trusted leader in strengthening financial security, expanding access to capital, and ensuring economic stability for businesses, families, and communities. We work across sectors to develop practical, scalable solutions that create lasting change. Through innovation, strategic investment, and collaboration, we build the infrastructure needed to sustain small business growth, housing opportunities, and financial well-being in an evolving economic landscape. Learn more at ###
