Chicago Financial Advisor – Custodial Accounts

  • Tax Advantages – In 2011, the first $950 of a child’s income generally is tax-exempt, the next $950 of unearned income generally is taxed at the child’s tax rate, and unearned income over $1,900 generally is taxed at the parent’s tax rate if the child is under age 19 (or is a full-time student under age 24) at the end of the year.7
  • Contributions – No maximum contribution amount. Contribute up to $13,000 (single tax filers) or $26,000 (married tax filers) per year per beneficiary without incurring a federal gift tax.
  • Limits – Make contributions until the statutory vesting age of the minor, usually between age 18 and 25.
  • Withdrawals can be made at any age.
  • Account Ownership – Custodian turns over the account to the minor at the vesting age.

View our pricing page to see any fees and charges that may apply to a Custodial Account.

Making contributions

  • Tax Advantages – In 2011, the first $950 of a child’s income generally is tax-exempt, the next $950 of unearned income generally is taxed at the child’s tax rate, and unearned income over $1,900 generally is taxed at the parent’s tax rate if the child is under age 19 (or is a full-time student under age 24) at the end of the year.7
  • Making Contributions – Any individual may contribute up to $13,000 ($26,000 for a married couple) per beneficiary per year, without incurring a federal gift tax. No statutory limits on contributions. There are no income limits on contributions.
  • Final Contributions need to be made by the minor’s statutory vesting age, usually between age 18 and 25, depending on state law.

There is no age limit on when withdrawals have to be completed.

Account ownership

  • The custodian owns the account until the beneficiary, or minor, reaches the statutory vesting age.

The money or property is then transferred to the minor.

Covered Expenses – Funds must be paid to or for the benefit of the minor. Funds can be used for any expense that benefits the minor, including but not limited to education expenses