This year I realized that the threshold had been reached to report our children's capital gains and pay the kiddie tax. I did so through our joint account return. I looked back at their 1099-div and it looks like at least 2021 and 2020 also need to be amended or returned. Both children are young and do not have earned income. Would it be easiest just to fire up the 2021 turbo tax and 2020 and create new returns for them or should we (the parents) amend our previous joint returns? It seems like it will save us money if we submit individual returns for the kids. When I did create a return for our daughter in TT 2021, there is not penalty or anything listed in the return even though we are over a year late which seems incorrect. I'm just not sure where to go with all of this. Thanks!
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If you are going to prepare the returns using the online version of TurboTax, you will have to pay for each return you prepare, whereas you can amend your return for free. There will only be a penalty if you owe tax and the late filing and payment of tax penalty will not show on your tax return, it will be assessed by the IRS and they will send you an invoice. It may be eaiser to amend your return, as you don't have to deal with factoring in your tax rate when preparing the children's tax returns.
Thanks!
I have the older versions of Turbo Tax, so was going to go through those. It seems to be $300 less if I submit a return for my daughter separate instead of amending my own return. Not sure if I was bumped up into a higher bracket or if it's because it's using a deduction for her...She should be able to claim a deduction for self even though she's being claimed as a dependent on my return, right?
I appreciate your info!!
Yes, but there are limits to that deduction. If your daughter can be claimed as a dependent on your return, your daughter's standard deduction for 2022 is limited to the greater of: (1) $1,150, or (2) your daughter's earned income plus $400 (but the total can't be more than the basic standard deduction for your daughter's filing status).
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