How does the kiddie tax work?

[disneysteve]

What are the rules for taxes on interest earned by minors? Is there a certain amount they can earn and not need to file a tax return? Or do they have to file no matter what? I know I can look this up at IRS, but I figured it was easier to ask you guys.

[PRICEPLUS]

Re: How does the kiddie tax work?

I have the same issue with my daughter. I am going to have to look it up.

[sweeps]

Re: How does the kiddie tax work?

The first $850 is exempt from taxes. The next $850 is at the child's tax rate (10% probably). Then anything after that is at your highest rate. Until the child turns 18.

[disneysteve]

Re: How does the kiddie tax work?

The first $850 is exempt from taxes.

Does that mean you don't need to file a return?

[sweeps]

Re: How does the kiddie tax work?

Correct. Filing test for dependents

[disneysteve]

Re: How does the kiddie tax work?

Thank you.

[PRICEPLUS]

Re: How does the kiddie tax work?

Ditto!