MDD1
Level 2

Get your taxes done using TurboTax

I provided the original post on this thread, and I have an update that I'd like to run by the community here.

 

My son and I just completed his 2019 tax return, and I was disappointed that that his taxes were about the same as last year when the Kiddie Tax was applied at the estate rate.  So I looked at Form 8615 (Tax for Certain Children Who Have Unearned Income) in the TurboTax forms section and saw a block between line 6 and 7 that is "Election to Use Pre-TCJA Calculation Smart Worksheet."  TCJA is Tax Cuts and Jobs Act which created this mess as explained in this article: https://www.marketwatch.com/story/the-secure-act-has-a-present-for-parents-an-easing-of-kiddie-tax-p...

 

Once I checked that block to make that election, my son's tax burden decreased substantially.  This created another Form 8615 worksheet titled "Parent's Investment & Net Capital Gain Worksheet" where I'm currently entering my parental taxable income that presumably allows his tax rate to equal mine.

 

Does this seem like the right process?  If so, it doesn't seem like an intuitive process, and a less curious or less informed taxpayer would be paying way to much tax if they simply plug and chug their numbers in TurboTax.