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Setting aside money for your child’s future is one of the most responsible things a parent can do—but it’s not always as simple as opening a savings account and letting it grow. Believe it or not, child savings can be hit with unexpected taxes that reduce the very funds you’ve worked hard to build. From interest income to gift limits and even scholarship-related tax rules, there are hidden costs parents don’t always see coming. Without a little planning and awareness, the IRS could end up claiming a bigger chunk of your child’s nest egg than you ever intended. Here are 11 tax surprises that can quietly erode child savings—and what you can do to protect them.
