Should You Open A Custodial Account For Your Kid?
- By
Julia Austin
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Your kids will still be taxed
There are specific rules regarding taxes in these sorts of accounts, and they vary depending on how much is earned and what type of account you open. But know that they are not tax-free. Your child will most likely see a small tax break or a “kiddie tax” since she is a minor, and the interest is considered “unearned income” as she isn’t accessing it or spending it.
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