Should You Open A Custodial Account For Your Kid?
- By
Julia Austin
Source: Romix Chang / EyeEm / Getty
So it’s not a tax shelter
It’s important to cover this tax issue as many parents make the mistake of trying to use the custodial account as a tax shelter, ushering tens of thousands in each year (intended for things like college education), and expecting to get off the hook for paying taxes on it. That is not the case, and you don’t want be surprised by a big bill from the IRS regarding this type of account.
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