What about UGMA accounts?

[dcustom93]

I have 2 children, both with UGMA accounts.  What do I need to do for these accounts with our taxes? We contributed $600 to EACH account this year.

[TomYoung · Accepted solution]

The assets inside the UGMA accounts are your children's assets, not yours, and they are responsible for reporting any income associated with these assets if the amounts are over the reportable limit.  You've made non-tax-deductible gifts to each child.  If this is the first year of funding of the accounts then there's almost certainly no reporting required.  The current threshold for reporting "unearned income" (e.g., interest, dividends an capital gains), is $1,050 if they have no other, "earned", income.

Hopefully your future contributions and financial skills will get them over the threshold at some point so you should at least roughly familiarize yourself with the "kiddie tax".

https://ttlc.intuit.com/questions/1900671-what-is-the-kiddie-tax

https://ttlc.intuit.com/questions/1901223-how-do-i-report-and-pay-the-kiddie-tax

Tom Young