Yes, you either have an option to file on your own return or file a tax return in your child's name. The result is the same because a Form 8615 will be filed with your return regardless. Form 8615 is automatically generated in a return for this type of return to determine taxable amounts of the 1099B for the parent's as well as the child. If you file their return with your own, you will avoid having to make 8615 entries regarding your own income as the information will already be populated in your return. On a separate return, you will manually need to record this income and other pertinent information when it is asked for in the interview.
If you are using Turbo Tax desktop, you may file this as a separate return within the program. You are allowed to add as many as 100 returns in the program but there is an efile limit of 5 returns per desktop product. As you enter information about your child, be sure you indicate that he/she is a dependent of someone else. This will generate an 8615 in the return and this will be taxed at your child tax rate on $1250 worth of income and at your tax rate for any portion over $2500.
If you choose to file with your own return, you can do so by:
- With your return open, go to Federal Taxes.
- Wages and income
- Less Common Income
- Child's income (Under 24)
As an FYI, you may wish to prepare your return using both methods I suggest just to see what the overall outcome is between the two returns to choose what may be right for you.
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