Need professional tax help to prepare your tax return. You should be using former IRS Agents who know all the possible rules and regs to get you the most favorable tax position.
There are certain Tax Rules can affect Your child’s investment income. Check with us to make sure your tax return is not flagged for a IRS tax audit.
Many parents may not realize that there are tax rules that may affect their child’s investment income.
Four Major Rules that may apply:
1. Investment Income.
Children with investment income may have part or all of this income taxed at their parents’ tax rate rather than at the child’s rate. Investment income includes interest, dividends, capital gains and other unearned income. Call us to check for other types of unearned income.
2. Age requirements.
The child’s tax must be figured using the parents’ rates if the child has investment income of more than $1,900 and meets one of three age requirements for 2011:
1. Was under age 18 at the end of the year,
2. Was age 18 at the end of the year and did not have earned income that was more than half of his or her support, or
3. Was a full-time student over age 18 and under age 24 at the end of the year and did not have earned income that was more than half of his or her support.
3. Form 8615 To figure the child’s tax using the parents’ rate for the child’s return, fill out Form 8615, Tax for Certain Children Who Have Investment Income of More Than $1,900, and attach it to the child’s federal income tax return.
4. Form 8814.
When certain conditions are met, a parent may be able to avoid having to file a tax return for the child by including the child’s income on the parent’s tax return. In this situation, the parent would file Form 8814, Parents’ Election To Report Child’s Interest and Dividends.
If you need any tax help help for any tax matter or IRS situation call us today.
Fresh Start Tax 1-866-700-1040
