Posts by Dan Madden, CFP®

Sarah, age 16, is claimed as a dependent by her parents. In 2025, she earned $2,500 from a part-time job and received $6,000 in dividends from a custodial investment account her grandparents set up for her. Her parents have a marginal tax rate of 24%. How will Sarah’s unearned income be taxed under the Kiddie…

Jan, a single 35-year-old marketing manager, earns $90,000 annually and has monthly living expenses of $5,000, which include rent, utilities, food, transportation, and minimum debt payments. She has $8,000 in a high-yield savings account and $12,000 in a taxable brokerage account. Sarah wants to ensure she has an adequate emergency fund. Which of the following…

Sarah, a 40-year-old single mother with two dependent children, is looking for life insurance coverage to provide financial security for her family. She has a stable job with a salary of $80,000 per year, $50,000 in savings, and a mortgage balance of $250,000. Sarah wants a policy that offers the most affordable way to provide…

Michael, a 68-year-old widower, wants to ensure that his estate passes efficiently to his two children while minimizing estate taxes and avoiding probate. His estate is valued at $5 million, and he has a revocable living trust, a will, and a durable power of attorney. Which of the following strategies would be most effective in…

John and Emily are married and file their taxes jointly. In 2024, they had the following expenses: $8,000 in mortgage interest on their primary residence $4,500 in state income taxes $3,000 in property taxes $2,000 in charitable donations $7,000 in medical expenses (their adjusted gross income is $100,000) If John and Emily want to maximize…

Jennifer and Mark have a 14-year-old son, Ryan, who earned $500 in wages from a part-time job and received $3,000 in interest income from an investment account set up by his grandparents. How will Ryan’s income be taxed under the “kiddie tax” rules for 2025? The entire $3,500 will be taxed at Ryan’s tax rate.…