The kiddie tax could affect your children until they’re young adults

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The kiddie tax could affect your children until they’re young adults

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January 9, 2024 , , ,

kiddie tax

The so-called “kiddie tax” can cause some of a child’s unearned income to be taxed at the parent’s higher marginal federal income tax rates instead of at the usually much lower rates that a child would otherwise pay. For purposes of this federal income tax provision, a “child” can be up to 23 years old. So, the kiddie tax can potentially affect young adults as well as kids.

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Key 2024 inflation-adjusted tax amounts for individuals

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November 21, 2023 , , ,

2024 tax adjustments

The IRS recently announced various 2024 inflation-adjusted federal tax amounts that affect individual taxpayers.

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Strategies for investors to cut taxes as year-end approaches

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November 29, 2022 , , ,

year-end investor taxes

The overall stock market has been down during 2022 but there have been some bright spots. As year-end approaches, consider making some moves to make the best tax use of paper losses and actual losses from your stock market investments.

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Stock market investors: Year-end tax strategies to consider

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December 14, 2021 , , ,

investment taxes

Year-end is a good time to plan to save taxes by carefully structuring your capital gains and losses.

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Selling securities by year end? Avoid the wash sale rule

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October 22, 2019 , , ,

If you’re planning to sell assets at a loss to offset gains that have been realized during the year, it’s important to be aware of the “wash sale” rule.
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Take advantage of the gift tax exclusion rules

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October 2, 2019 , , , , ,

gift tax exclusions

As we head toward the gift-giving season, you may be considering giving gifts of cash or securities to your loved ones. Taxpayers can transfer substantial amounts free of gift taxes to their children and others each year through the use of the annual federal gift tax exclusion. The amount is adjusted for inflation annually. For 2019, the exclusion is $15,000.
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The “kiddie tax” hurts families more than ever

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July 30, 2019 , , , ,

kiddie tax

Years ago, Congress enacted the “kiddie tax” rules to prevent parents and grandparents in high tax brackets from shifting income (especially from investments) to children in lower tax brackets. And while the tax caused some families pain in the past, it has gotten worse today. That’s because the Tax Cuts and Jobs Act (TCJA) made changes to the kiddie tax by revising the tax rate structure.
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Investment Interest Expense is Still Deductible, But That Doesn’t Necessarily Mean You’ll Benefit

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January 31, 2019 , , , ,

investment interest expense

As you likely know by now, the Tax Cuts and Jobs Act (TCJA) reduced or eliminated many deductions for individuals. One itemized deduction the TCJA kept intact is for investment interest expense. This is interest on debt used to buy assets held for investment, such as margin debt used to buy securities. But if you have investment interest expense, you can’t count on benefiting from the deduction.
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Why the “Kiddie Tax” is More Dangerous Than Ever

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July 26, 2018 ,

kiddie tax

Once upon a time, some parents and grandparents would attempt to save tax by putting investments in the names of their young children or grandchildren in lower income tax brackets. To discourage such strategies, Congress created the “kiddie” tax back in 1986. Since then, this tax has gradually become more far-reaching. Now, under the Tax Cuts and Jobs Act (TCJA), the kiddie tax has become more dangerous than ever.
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