Smart Tax Strategies for Growing Families
💡 UTMA accounts offer a flexible, powerful way to invest in your child's future— but families should be mindful of the "kiddie tax." This federal tax rule limits how much unearned income (like dividends and interest) a child can receive before triggering a higher tax rate. A recent article from Kiplinger breaks down ways to lower the tax burden and keep more money growing for your child.
UNest simplifies this process. We help families stay below kiddie tax thresholds through diversified investing, strategic gifting, and automated saving. Our platform is designed to maximize growth while minimizing surprises.
Most importantly, understanding the rules gives families the power to plan better. If your child’s investment income stays under $2,500 (as of 2025), it’s taxed at a lower rate. Anything beyond that could be taxed at the parent’s higher rate. The key takeaway? Start early, contribute steadily, and be mindful of annual gains.
Pair financial knowledge with smart tools like UNest and you’ll be ahead of the curve.
This material is for informational purposes only and should not be construed as financial, legal, or tax advice. You should consult your own financial, legal, and tax advisors before engaging in any transaction. Information, including hypothetical projections of finances, may not take into account taxes, commissions, or other factors which may significantly affect potential outcomes. This material should not be considered an offer or recommendation to buy or sell a security. While information and sources are believed to be accurate, UNest does not guarantee the accuracy or completeness of any information or source provided herein and is under no obligation to update this information.
Don't just take our word for it
Hear what trusted money experts say about why UTMA and UGMA accounts can be a smart way to invest for a child’s future.
There are some tax advantages to using UGMA and UTMA accounts… Since they’re in your child’s name, the accounts will be taxed according to their tax bracket… There are no contribution limits on UGMA and UTMA accounts.
Dave Ramsey
Personal Finance Expert
Read
Tap to flip back
Investing for your kid’s future
Dave Ramsey
Personal Finance Expert
Tap for more
...you could consider opening an account where you can dive deeper with the kids by your side. The easiest way to do so is to open a custodial account, known as an UGMA ... or UTMA ... account.
Jill Schlesinger
Emmy winning Business Analyst
Read
Tap to flip back
Straightforward “starter” investing account for kids
JILL SCHLESINGER
Emmy winning Business Analyst
Tap for more
You can give children money that can accumulate somewhat tax-free over time... I love them (UTMAs) because they were like, trusts that you didn't need lawyers to create.... I think it's one of the better tax breaks around though. I know hunting for tax breaks may not sound very exciting, but that's how you take care of your family.
Jim Cramer
CNBC Host
Watch
Tap to flip back
Give children money that can accumulate over time
Jim Cramer
CNBCÂ Host
Tap for more
