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New Member

Do I have to file separately for my dependent child who has more than $1,050 in dividends and capital gains?

 
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New Member

Do I have to file separately for my dependent child who has more than $1,050 in dividends and capital gains?

No. Dependents who have unearned income, such as interest, dividends or capital gains, will generally have to file their own tax return if that income is more than $1,050 for 2017 (income levels are higher for dependents 65 or older or blind).

A parent can elect to claim the child's unearned income on the parent's return if certain criteria are met. If the dependent child's 2017 unearned income is less than $10,500, he made no estimated tax payments during the year, and he had no income tax withheld at the source, parents can generally elect to claim his investment income on their own return.

This election, using IRS Form 8814, simplifies the reporting of the income and makes it so that the child does not have to file a separate return; however, it can create more overall tax liability, depending on the parents' tax situation. A child may pay as low a tax rate at 0 percent, whereas the parents will likely be paying a higher rate.

On investment income over $2,100, however, children will be taxed at the parents' rate anyway, even if they file their own returns. Consider calculating the overall impact on taxes of each method before choosing. (TurboTax can help with this.)



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Level 15

Do I have to file separately for my dependent child who has more than $1,050 in dividends and capital gains?

If your child is younger than age 19 or a full-time student age 19-23, he or she must file a tax return for 2017 if he or she had any of the following:
 - Unearned income (interest, dividends, capital gains, taxable scholarships, unemployment compensation) of more than $1,050.
 - Earned income (wages, salaries, tips, and fees) of more than $6,350.
 - Gross income (earned and unearned income) was more than the larger of:
  $1,050 or earned income (up to $6,350) plus $350

If your child is younger than 19 or a full-time student age 19-23 and is required to file a return, you may be able to report the child's income on your return using Form 8814, Parent's Election to Report Child's Interest and Dividends. If you do, the child is not required to file a return.

If you decide not to report your child's income on your return, or you don't qualify to use Form 8814, the child must file a return, and may have to file Form 8615, Tax for Certain Children who have Unearned Income of More Than $2,100.

Note: If your child had earned income (wages, salaries, and tips) you are not allowed to enter that income on the parent's return.
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New Member

Do I have to file separately for my dependent child who has more than $1,050 in dividends and capital gains?

Thank you.
My child has just slightly passed the $1,050 mark.
If I file separately for him, do I still report him as a dependent on my tax return?
Level 7

Do I have to file separately for my dependent child who has more than $1,050 in dividends and capital gains?

In filling out his return, he must indicate that someone else can claim him..You can continue to claim him.
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New Member

Do I have to file separately for my dependent child who has more than $1,050 in dividends and capital gains?

Thank you.
Highlighted
New Member

Do I have to file separately for my dependent child who has more than $1,050 in dividends and capital gains?

No. Dependents who have unearned income, such as interest, dividends or capital gains, will generally have to file their own tax return if that income is more than $1,050 for 2017 (income levels are higher for dependents 65 or older or blind).

A parent can elect to claim the child's unearned income on the parent's return if certain criteria are met. If the dependent child's 2017 unearned income is less than $10,500, he made no estimated tax payments during the year, and he had no income tax withheld at the source, parents can generally elect to claim his investment income on their own return.

This election, using IRS Form 8814, simplifies the reporting of the income and makes it so that the child does not have to file a separate return; however, it can create more overall tax liability, depending on the parents' tax situation. A child may pay as low a tax rate at 0 percent, whereas the parents will likely be paying a higher rate.

On investment income over $2,100, however, children will be taxed at the parents' rate anyway, even if they file their own returns. Consider calculating the overall impact on taxes of each method before choosing. (TurboTax can help with this.)



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New Member

Do I have to file separately for my dependent child who has more than $1,050 in dividends and capital gains?

Thank you.