SunAmerica Mutual Funds Offers 10 Tips for Teaching Children About Money During This Tax Season

Apr 11, 2001, 01:00 ET from SunAmerica Mutual Funds

    NEW YORK, April 11 /PRNewswire/ -- As Americans prepare for the looming
 annual tax deadline, educators suggest the season is a great opportunity to
 teach children some basics about money and taxes.  The teachers and principals
 who developed the SunAmerica Mutual Funds' Kids Investing for Dollars and
 Sense (K.I.D.S.) Program, have developed 10 tips for parents to use to teach
 middle school-aged children about income taxes and money.
     "Many children hear their parents talk about taxes, but they don't
 understand what taxes are," said Judy Sullivan, a Consumer Science teacher at
 the Robert E. Bell School in Chappaqua and a member of SunAmerica Mutual Funds
 advisory board of educators.  "Parents can use this as an opportunity to
 explain why we pay taxes, as well as to discuss about money in general."
 
     Some tips include:
 
     1.  Discuss with your children what taxes pay for on a local, state and
         national level.  Ask them to write down ten things that taxes support.
         Some of these expenses are: schools, public safety, universities,
         military, libraries, hospitals, and national parks.
 
     2.  Taxable Income -- What percentage of your money goes to taxes?
         Explain that someone earning $50,000 a year will have to pay the
         government $10,000 to $15,000 of his or her annual salary.  People at
         different salaries are taxed at different rates.  Give your children
         this problem to solve.  If Dan makes $50,000 per year and pays $15,000
         in taxes what percentage of his money goes to taxes?
 
     3.  Exemptions -- Using your own taxes as an example, explain to your
         children that they are listed as an exemption.  If you pay for
         childcare, note this exemption as well.  Explain that the larger the
         family, the lower the taxes.
 
     4.  Deductions -- Interest on mortgages, pension plans, cost of childcare,
         medical expenses, education, and professional publications are all
         examples of typical deductions.  Make a list of deductions and work
         with your children to determine an estimate for these deductions.  Add
         together the items on this list and discuss why the government allows
         us to take these deductions.
 
     5.  Rent vs. Buy -- When is it advantageous from a tax perspective to buy
         a house rather than rent it?  Visit a real estate website such as
         Corcoran and have your children use their mortgage calculator to
         determine various mortgage rates for homes or apartments they read
         about in newspaper real estate ads.  Explain that, in some cases, it
         is better to rent when mortgage rates are very high.
 
     6.  Pensions -- The earlier one invests in a pension plan, the more money
         he or she will receive at retirement.  Detail the various types of
         pensions -- company pensions, where the employer pays all costs,
         401(K) plans, where employers may match an employee's contributions or
         a SEP plan if you own your own business.  Explain what an IRA
         (Individual Retirement Account) is and ask your children to figure out
         how much money they would have in 2061 (assuming a 6% rate of return)
         if they put away $2,000 in an IRA in 2001? ($70,000).
 
     7.  Taxes and Businesses -- Explain the tax advantages to owning a
         business.  All of the expenses that go into running a business are tax
         deductible.  The downside of having your own business would be payroll
         taxes, record keeping, heath insurance cost, licenses, fees and
         insurance.  For example, if you are operating a lemonade stand and
         plan to report your business and income to the Internal Revenue
         Service you would keep careful records of money you spent for lemons,
         sugar, cups, pitchers napkins, magic marker, poster board, and the
         lemonade stand.  Have your children name a business they might like to
         run and make a list of necessary expenses.
 
     8.  Talk about your own investment style.  Do you buy stocks or mutual
         funds?  Discuss the advantages of each.  Do you buy bonds and tax-free
         municipal bonds?  Introduce the concept of capital gains.  Taxpayers
         receive capital gains when they sell stocks or mutual funds that have
         gone up in value or in the sale of a home.
 
     9.  Explain how the Social Security Administration uses employee's taxes
         to make payments to people who are retired or disabled. Have your
         child list ten reasons why Social Security is important.
 
     10. Explain what charitable contributions are and discuss with your child
         why they are important and tax deductible.  Mention some of the
         nonprofit organizations you support and why you do so.
 
     SunAmerica Mutual Funds, a division of SunAmerica Inc. sponsors the
 K.I.D.S. (Kids Investing for Dollars and Sense) program to help educators
 teach children the value of saving money.  The K.I.D.S. program guide,
 developed by teachers and principals in New York and Chicago includes an
 overview of the origins of money, creating a budget, opening checking and
 savings accounts, credit, stocks, bonds, mutual funds and techniques of
 advertising.
     SunAmerica Mutual Funds, a unit of SunAmerica Asset Management Corp.
 manages and/or administers 29 U.S. retail funds with approximately
 $7.5 billion in assets.  Its total assets under management, including those
 held in separate accounts, totals $26.3 billion.  SunAmerica Asset Management
 Corp. is a subsidiary of SunAmerica Inc., a financial services company
 specializing in retirement savings and a member of American International
 Group, Inc. (AIG).  The company provides nearly two million American families
 with a broad range of high-quality products and services.  To learn more about
 SunAmerica's mutual funds, visit http://www.sunamericafunds.com.
     SunAmerica, The Retirement Specialist, has been a long time supporter of
 education.  Last year, Eli Broad, SunAmerica Inc.'s Chairman and his family
 established The Broad Foundation, committing an initial $100 million to
 improve governance, management and labor relations in the nation's largest
 urban school systems.  In 1999, Mr. Broad was the first recipient of the KCET
 Visionary Award for making outstanding contributions to culture, art and
 education.
     SunAmerica Asset Management Corp. manages and/or administers 27 U.S.
 retail funds with approximately $8.3 billion in assets.  Its total assets
 under management, including those held in separate accounts, totals
 $30.5 billion.  SunAmerica Asset Management Corp. is a subsidiary of
 SunAmerica Inc., a financial services company specializing in retirement
 savings and a member of American International Group, Inc. (AIG).  The company
 provides nearly two million American families with a broad range of
 high-quality products and services.  To learn more about SunAmerica's mutual
 funds, visit http://www.sunamericafunds.com
     AIG is the leading U.S.-based international insurance and financial
 services organization and the largest underwriter of commercial and industrial
 insurance in the United States.  Its member companies write a wide range of
 commercial and personal insurance products through a variety of distribution
 channels in approximately 130 countries and jurisdictions throughout the
 world. AIG's global businesses also include financial services and asset
 management, including aircraft leasing, financial products, trading and market
 making, consumer finance, institutional, retail and direct investment fund
 asset management, real estate investment management, and retirement savings
 products.  American International Group, Inc.'s common stock is listed on the
 New York Stock Exchange, as well as the stock exchanges in London, Paris,
 Switzerland and Tokyo.
 
 

SOURCE SunAmerica Mutual Funds
    NEW YORK, April 11 /PRNewswire/ -- As Americans prepare for the looming
 annual tax deadline, educators suggest the season is a great opportunity to
 teach children some basics about money and taxes.  The teachers and principals
 who developed the SunAmerica Mutual Funds' Kids Investing for Dollars and
 Sense (K.I.D.S.) Program, have developed 10 tips for parents to use to teach
 middle school-aged children about income taxes and money.
     "Many children hear their parents talk about taxes, but they don't
 understand what taxes are," said Judy Sullivan, a Consumer Science teacher at
 the Robert E. Bell School in Chappaqua and a member of SunAmerica Mutual Funds
 advisory board of educators.  "Parents can use this as an opportunity to
 explain why we pay taxes, as well as to discuss about money in general."
 
     Some tips include:
 
     1.  Discuss with your children what taxes pay for on a local, state and
         national level.  Ask them to write down ten things that taxes support.
         Some of these expenses are: schools, public safety, universities,
         military, libraries, hospitals, and national parks.
 
     2.  Taxable Income -- What percentage of your money goes to taxes?
         Explain that someone earning $50,000 a year will have to pay the
         government $10,000 to $15,000 of his or her annual salary.  People at
         different salaries are taxed at different rates.  Give your children
         this problem to solve.  If Dan makes $50,000 per year and pays $15,000
         in taxes what percentage of his money goes to taxes?
 
     3.  Exemptions -- Using your own taxes as an example, explain to your
         children that they are listed as an exemption.  If you pay for
         childcare, note this exemption as well.  Explain that the larger the
         family, the lower the taxes.
 
     4.  Deductions -- Interest on mortgages, pension plans, cost of childcare,
         medical expenses, education, and professional publications are all
         examples of typical deductions.  Make a list of deductions and work
         with your children to determine an estimate for these deductions.  Add
         together the items on this list and discuss why the government allows
         us to take these deductions.
 
     5.  Rent vs. Buy -- When is it advantageous from a tax perspective to buy
         a house rather than rent it?  Visit a real estate website such as
         Corcoran and have your children use their mortgage calculator to
         determine various mortgage rates for homes or apartments they read
         about in newspaper real estate ads.  Explain that, in some cases, it
         is better to rent when mortgage rates are very high.
 
     6.  Pensions -- The earlier one invests in a pension plan, the more money
         he or she will receive at retirement.  Detail the various types of
         pensions -- company pensions, where the employer pays all costs,
         401(K) plans, where employers may match an employee's contributions or
         a SEP plan if you own your own business.  Explain what an IRA
         (Individual Retirement Account) is and ask your children to figure out
         how much money they would have in 2061 (assuming a 6% rate of return)
         if they put away $2,000 in an IRA in 2001? ($70,000).
 
     7.  Taxes and Businesses -- Explain the tax advantages to owning a
         business.  All of the expenses that go into running a business are tax
         deductible.  The downside of having your own business would be payroll
         taxes, record keeping, heath insurance cost, licenses, fees and
         insurance.  For example, if you are operating a lemonade stand and
         plan to report your business and income to the Internal Revenue
         Service you would keep careful records of money you spent for lemons,
         sugar, cups, pitchers napkins, magic marker, poster board, and the
         lemonade stand.  Have your children name a business they might like to
         run and make a list of necessary expenses.
 
     8.  Talk about your own investment style.  Do you buy stocks or mutual
         funds?  Discuss the advantages of each.  Do you buy bonds and tax-free
         municipal bonds?  Introduce the concept of capital gains.  Taxpayers
         receive capital gains when they sell stocks or mutual funds that have
         gone up in value or in the sale of a home.
 
     9.  Explain how the Social Security Administration uses employee's taxes
         to make payments to people who are retired or disabled. Have your
         child list ten reasons why Social Security is important.
 
     10. Explain what charitable contributions are and discuss with your child
         why they are important and tax deductible.  Mention some of the
         nonprofit organizations you support and why you do so.
 
     SunAmerica Mutual Funds, a division of SunAmerica Inc. sponsors the
 K.I.D.S. (Kids Investing for Dollars and Sense) program to help educators
 teach children the value of saving money.  The K.I.D.S. program guide,
 developed by teachers and principals in New York and Chicago includes an
 overview of the origins of money, creating a budget, opening checking and
 savings accounts, credit, stocks, bonds, mutual funds and techniques of
 advertising.
     SunAmerica Mutual Funds, a unit of SunAmerica Asset Management Corp.
 manages and/or administers 29 U.S. retail funds with approximately
 $7.5 billion in assets.  Its total assets under management, including those
 held in separate accounts, totals $26.3 billion.  SunAmerica Asset Management
 Corp. is a subsidiary of SunAmerica Inc., a financial services company
 specializing in retirement savings and a member of American International
 Group, Inc. (AIG).  The company provides nearly two million American families
 with a broad range of high-quality products and services.  To learn more about
 SunAmerica's mutual funds, visit http://www.sunamericafunds.com.
     SunAmerica, The Retirement Specialist, has been a long time supporter of
 education.  Last year, Eli Broad, SunAmerica Inc.'s Chairman and his family
 established The Broad Foundation, committing an initial $100 million to
 improve governance, management and labor relations in the nation's largest
 urban school systems.  In 1999, Mr. Broad was the first recipient of the KCET
 Visionary Award for making outstanding contributions to culture, art and
 education.
     SunAmerica Asset Management Corp. manages and/or administers 27 U.S.
 retail funds with approximately $8.3 billion in assets.  Its total assets
 under management, including those held in separate accounts, totals
 $30.5 billion.  SunAmerica Asset Management Corp. is a subsidiary of
 SunAmerica Inc., a financial services company specializing in retirement
 savings and a member of American International Group, Inc. (AIG).  The company
 provides nearly two million American families with a broad range of
 high-quality products and services.  To learn more about SunAmerica's mutual
 funds, visit http://www.sunamericafunds.com
     AIG is the leading U.S.-based international insurance and financial
 services organization and the largest underwriter of commercial and industrial
 insurance in the United States.  Its member companies write a wide range of
 commercial and personal insurance products through a variety of distribution
 channels in approximately 130 countries and jurisdictions throughout the
 world. AIG's global businesses also include financial services and asset
 management, including aircraft leasing, financial products, trading and market
 making, consumer finance, institutional, retail and direct investment fund
 asset management, real estate investment management, and retirement savings
 products.  American International Group, Inc.'s common stock is listed on the
 New York Stock Exchange, as well as the stock exchanges in London, Paris,
 Switzerland and Tokyo.
 
 SOURCE  SunAmerica Mutual Funds