Can you invest?

Is it possible for college student who dont work to invest in mutual funds? About the taxes that is needed to padi t the IRS?

Possibly. Allow me to outline the steps.

1. Get some money (otherwise steps 2 and 3 are worthless)
2. Open an individual brokerage account (not an IRA since you dont have any earned income). Turn on CNBC for 5 minutes and 10 of them will advertise. I use a Fidelity retail account because they have many no-load mutual funds with no ticket charges.
3. You might not have to pay any taxes depending on the capital gains and dividends the mutual funds throw off. (You will be able to take the standard deduction which I believe is over $5000 this year and will completely eliminate the dividends and capital gains you receive up to this amount)

You certainly can invest in mutual funds. You cannot establish an IRA because you are not working but you can definetly open up an individual account. Most states require that you be at least 18 years old. If at the end of the year you owe taxes you can pay them from other savings you have or if necessary liquidate a portion of your mutual fund to pay the taxes. Tax payments do not have to come from earned income. Please read my profile and give me a shout if you would like to learn more.

Yes you can invest and should start as early as possible. With mutual funds, you pay taxes at the end of the year on any capital gains. With individual stocks, you don't pay taxes until you sell the stock even if its 40 years later.

I hope this helps. You can learn more on my forum at www.thestocktalk.net.