Do I have to include distribution from my children's inherited iras in my taxes? I know I include mine but was unsure about theirs since it's not my money. Thanks

[masemw]

I know I have to include my own distributions from my spirited IRA but since their iras are not my money I was unclear if I had to include

[DoninGA]

The children would report the distribution from their inherited IRA's on their tax returns.  You do not report their IRA distributions on your tax return.

However, if the amount of distribution is less than $12,950 they do not have to file a tax return.  If greater than they have to file a return and indicate on their tax return that they can be claimed as a dependent, assuming you are claiming them as a dependent on your tax return.

[NCperson]

@masemw - also, if the income is less than $12,950, but there was withholdings on the IRA distribution, the only way to get the withholdings back is to file.  But again, the children are not required to do so, the IRS will gladly keep the money! 🙂 

[dmertz]

Being dependents, if they have no earned income their standard deduction will be $1,150 and it's likely that at least some portion will be taxed on the childrens' Forms 8615 at the parents' tax rate.

[Opus 17]

If a child‘s only income was interest, dividends, or capital gains, the parents can choose to report the income on their own tax return.

However, that rule does not apply to distributions from an inherited IRA. Each child must file their own tax return in their own name. They will most likely be subject to the kiddie tax.

https://www.irs.gov/taxtopics/tc553

because TurboTax does not have a free online option that includes IRAs, you may want to purchase TurboTax from a CD or download to install on your own computer (which allows you to prepare and e-file up to five tax returns) or you may wish to go to the IRS free file website to find another online provider that will allow you to prepare free returns for your children.

[dmertz]

The Free online version supports entry of Forms 1099-R, but since you will be preparing multiple tax returns it would probably make more sense to use the CD/download version.