Kiddy tax

Forum|Forum|2 years ago
February 29, 2024
1 reply
16 views

Q1: If a child is 10 years old and have an interest income of $2400 from ibond (i.e., less than $2500) in 2023, and it was the only income that the child had in 2023, should this be reported on the parents' income tax return or on a kiddy tax return?

Q2: Is there a difference in the amount of tax to be paid filing either on parents' return or a kiddy tax return?

Q3: If one files kiddy tax, which form should one use? 1040 ES? I assume that if you file Federal kiddy tax, you should also file the state kiddy tax, correct?

Thanks.

Bsch4477

Level 15

Since the amount was less than $2,500 Kiddie Tax does not apply. The income can be deleting it on the child’s return or you can elect to report it on yours. Details here:

https://www.irs.gov/publications/p501#en_US_2023_publink1000220711

Tax2019PayAuthor

Level 6

Thanks. It is better to file for the child to get lower overall tax? To file for the child, which form to use, 1040ES? Thanks

rjs

Level 15

It's almost always better to file a separate tax return for the child. You might end up paying more tax if you include the child's interest income on the parents' tax return.

Form 1040-ES is not a tax return. All tax returns are filed on Form 1040. If you use TurboTax to prepare the child's tax return, TurboTax will fill out the proper forms. If you are using TurboTax Online, you should be able to use TurboTax Free Edition for the child's return.