Kiddie Tax
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Don’t Forget About the Kiddie Tax
A key to maximizing a family’s after-tax investment income is to navigate the Kiddie Tax. Don’t make gifts of investment property to children or grandchildren without knowing the rules. The Kiddie Tax applies to unearned (investment) income of people under age 19 (or dependent, full-time students under age 24). The Kiddie Tax was enacted to […]
How the Kiddie Tax, 529 Plans Were Changed by SECURE Act
Some significant changes in family income tax planning were included in the Setting Up Every Community for Retirement Enhancement (SECURE) Act enacted late in 2019.The biggest change is the reversal of the Kiddie Tax rules. The Kiddie Tax was overhauled in the Tax Cuts and Jobs Act (TCJA) enacted late in 2017. The Kiddie Tax […]
The New Kiddie Tax: How It Might Change Gift Giving
Before making gifts to children and grandchildren, carefully consider the new kiddie tax. The Tax Cuts and Jobs Act greatly simplified the Kiddie Tax. The tax was imposed in the Tax Reform Act of 1986 on unearned (investment) income of children. The idea was to end income splitting. That was the practice of high-income earners […]
How to Navigate the “Kiddie Tax”
Shifting assets and income to your children and grandchildren can provide many benefits, including tax benefits. That’s why Congress set up hurdles to keep you from enjoying all the potential tax benefits. When planning gifts of investments to your loved ones, be aware of the kiddie tax. This tax was created in 1986 to reduce […]
Estate Planning Strategies for Navigating the Kiddie Tax
Shifting assets and income to your children and grandchildren can provide many benefits, including tax benefits. That’s why Congress set up hurdles to keep you from enjoying all the potential tax benefits. When planning gifts of investments to your loved ones, be aware of the kiddie tax. This tax was created in 1986 to reduce […]
Estate Planning Strategies for Navigating the Kiddie Tax
Shifting assets and income to your children and grandchildren can provide many benefits, including tax benefits must be past of your estate planning. That’s why Congress set up hurdles to keep you from enjoying all the potential tax benefits. When planning gifts of investments to your loved ones, be aware of the kiddie tax. This […]
New Kiddie Tax Rules: Implications and Strategies
In last month’s visit I pointed out that the kiddie tax rules changed recently and would change again soon. The amendment occurred sooner than expected. The tax changes were put in the Iraq War funding bill in May (along with an increase in the minimum wage), and the details make the Kiddie Tax more restrictive […]
Kiddie Tax Rule Updates
Congress changed the kiddie tax rules for 2006 and is getting ready to change them again. Each change results in higher taxes for most families if strategies are not changed. Family income splitting has been a valuable tax strategy. A high tax bracket family member, such as a parent or grandparent, gives income producing property […]
