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Kiddie Tax

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Kiddie tax
Tax owed for the investment income of children if the amount is more than $1,400.
Kiddie Tax
A tax on the earnings of a minor child under the age of 18 who earns more than a certain amount in a given year when he/she are not working a paid job. The earnings over and above this amount (which is determined annually) are taxed at the child's parent's or guardian's tax rate. The kiddie tax was created in 1986 to remove the incentive for people to avoid taxes by "giving" stock to their children in a way to make it exempt from taxes. The kiddie tax was introduced in 1986.
kiddie tax
A federal income tax levied on the investment income of children under 14 years of age. Investment income above a specified amount is taxed at the parent's top, or marginal, tax rate. The kiddie tax is designed to make it less advantageous for parents to shift income to their children.
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It's going to involve a tremendous amount of planning for CPAs," particularly where families with college students might be liable for the recently expanded kiddie tax, said Art Auerbach, CPA, a tax director at Goodman & Co.
Stimulus Act eases taxes for individuals, small businesses by Nevius, Alistair M.; Bonner, Paul / Journal of Accountancy
New Kiddie Tax Rules for 2008 Rethink strategies for shifting income to family members in lower tax brackets.
20 Year-End Moves to Reduce Your 2008 Tax Bill by Kiplinger Washington Editors / Kiplinger.com
In 2008, the kiddie tax will be further expanded to children who qualify as dependents because they are under the age of 19, or under 24 and a fulltime student, if their earned income doesn't exceed one-half of the amount needed for their support.
Year-end tax tips, planning can mean money in your pocket by Wieder, Marc / Real Estate Weekly
 
 
 
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