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cusiv
Returning Member

My daughter is my dependent 2017 AGI was 13703 (9914 LT cap gains) TAX 630 2.09% 2018 AGI is 21135 (15094 LT cap gains TAX 3785 17.9% Question why such an increase

 
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DDollar
Expert Alumni

My daughter is my dependent 2017 AGI was 13703 (9914 LT cap gains) TAX 630 2.09% 2018 AGI is 21135 (15094 LT cap gains TAX 3785 17.9% Question why such an increase

Prior to 2018 the "kiddie tax" on dependents' unearned income was assessed at the same tax rate as the parent's.  Starting in 2018, the tax is assessed at the rates paid by trusts and estates. Those rates can be as high as 37% or as high as 20% for long-term capital gains and dividends.Whether or not this explains the increase would depend on what your marginal tax rate was last year.  That is the only change to the Kiddie Tax for 2018.


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