Children who receive investment income are subject to special tax rules that affect how parents must report a child’s investment income. Some parents can include their child’s investment income on their tax return while other children may have to file their own tax return. If a child cannot file his or her own tax return for any reason, such as age, the child’s parent or guardian is responsible for filing a return on the child’s behalf.<\/p>\n
Here’s what you need to know about tax liability and your child’s investment income.<\/p>\n
1. Investment income normally includes interest, dividends, capital gains and other unearned income, such as from a trust.<\/p>\n
2. Special rules apply if your child’s total investment income in 2015 is more than $2,100 ($2,000 in 2014). The parent’s tax rate may apply to a part of that income instead of the child’s tax rate.<\/p>\n
3. If your child’s total interest and dividend income are less than $10,500 ($10,000 in 2014), then you may be able to include the income on your tax return. If you make this choice, the child does not file a return. Instead, you file Form 8814, Parents’ Election to Report Child’s Interest and Dividends<\/i>, with your tax return.<\/p>\n
4. If your child received investment income of $10,500 or more in 2015 ($10,000 in 2014), then he or she will be required to file Form 8615, Tax for Certain Children Who Have Investment Income of More Than $2,100<\/i>, with the child’s federal tax return for tax year 2015.<\/p>\n
In addition, starting in 2013, a child whose tax is figured on Form 8615, Tax for Certain Children Who Have Unearned Income, may be subject to the Net Investment Income Tax<\/i>. NIIT is a 3.8 percent tax on the lesser of either net investment income or the excess of the child’s modified adjusted gross income that is over a threshold amount.<\/p>\n
If you have any questions about tax rules for your child’s investment income in 2015, don’t hesitate to call.<\/p>\n","protected":false},"excerpt":{"rendered":"
Children who receive investment income are subject to special tax rules that affect how parents must report a child’s investment income. Some parents can include their child’s investment income on their tax return while other children may have to file their own tax return. If a child cannot file his or her own tax return […]<\/p>\n","protected":false},"author":17,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-2659","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/lmgw.com\/wordpress\/wp-json\/wp\/v2\/posts\/2659","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lmgw.com\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lmgw.com\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lmgw.com\/wordpress\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/lmgw.com\/wordpress\/wp-json\/wp\/v2\/comments?post=2659"}],"version-history":[{"count":1,"href":"https:\/\/lmgw.com\/wordpress\/wp-json\/wp\/v2\/posts\/2659\/revisions"}],"predecessor-version":[{"id":2660,"href":"https:\/\/lmgw.com\/wordpress\/wp-json\/wp\/v2\/posts\/2659\/revisions\/2660"}],"wp:attachment":[{"href":"https:\/\/lmgw.com\/wordpress\/wp-json\/wp\/v2\/media?parent=2659"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lmgw.com\/wordpress\/wp-json\/wp\/v2\/categories?post=2659"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lmgw.com\/wordpress\/wp-json\/wp\/v2\/tags?post=2659"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}