Financial birthdays to remember in 2002.

• Position: Taxation - Tax laws pertinent to certain ages - Brief Article

Sometime during this year, members of your family will celebrate their birthdays. Beyond simply being a year older, some of these birthdays may be financially significant because of tax or retirement reasons. According to the Financial Planning Association, Denver, Colo., these are:

Age 14. The "kiddie" tax goes away. That is the tax where any net investment income (not earned wages) exceeding $1,500 is taxed at the parent's marginal rate instead of the child's. Now, it all will be taxed at the child's rate, which is usually lower.

Age 17. If your child turns 17 during the year, you will no longer be able to claim the child tax credit ($600 in tax year 2002). This is also the last year you or others can contribute to your child's education IRA (now called the Coverdell education savings account). The exception is if your offspring is a "special needs" child. The maximum annual contribution is $2,000.

Age 18. In some states, age 18 is the age of majority, which means your offspring can do whatever he or she wants to with any money you've put into a custodial account (such as those specified in the Uniform Gifts to Minors Act).

Age 21. The age of majority in some states.

Age 29. The last chance to withdraw tax-free, for qualified education expenses, any earnings left in a Coverdell education savings account or name a new beneficiary for the account. Otherwise, any earnings left in the account when the current beneficiary turns 30 will face regular income taxes and a 10% penalty.

Age 50. You are eligible to take advantage of the new "catch up" retirement provisions Congress included in the Tax Relief Act in 2001. For example, this year, anyone age 50 or over can kick an extra $500 into an individual retirement account above the new $3,000 IRA maximum contribution. The catch-up amount for qualified retirement plans is $1,000, and both catch-up amounts rise in the coming years.

Age 55. Distributions from a qualified retirement or annuity plan are not subject to the 10% early withdrawal penalty as long as you are at least 55 years old during the year you leave your employer (if the plan allows this). The distributions are subject to regular income tax.

Age 59.5. You can start taking distributions from qualified retirement...