Dependent Tax Returns

Question 1

What is the filing requirement for a Dependent Tax Return?

Answer 1

Must file if:
1. Earned income only: EI > $1100
2. Unearned income only: UEI > $1100 + additional SD for blind or =>65
3. Both EI and UIE: GI >
[additional standard dedution + larger of:
*$1100 or
*EI +350 up to SD]

Additional single = $1650
Additional married = $1300

Question 2

What is Gross Income (GI)?

Answer 2

Unearned Income (UI) + Earned income (EI)

Question 3

What is earned income?

Answer 3

EI = income from personal services (ie: wages, self-employment, salary, tips

Question 4

What is the Standard Deduction for a dependent with unearned income?

Answer 4

The greater of:

1. $1100
2. earned income +350 up to 12,000 +additional

Additional amount for 65 or older / blind:
single = $1650
married = $1300

Question 5

What types of unearned income can a parent report for their child? How much can the parent report on their return?

Answer 5

1. parent can only use their own return if the child only has interest, dividends, and capital gains distributions
2. the UI must be under $11,000

Question 6

What form does a TP use if they want to report their dependent child’s interest, dividends or capital gains distributions?

Answer 6

Form 8814

Question 7

What is the Form that is used to calculate Kiddie Tax for a dependent child return?

Answer 7

Form 8615

Question 8

What are the requirements for reporting a dependent’s income on a parent’s return? (7)

Answer 8

1. Child must be under 19 or under 24 and full time student
2. Income can only be interest, dividends and capital gains distributions
3. The child’s Gross Income < $11,000
4. child would be required to file if the parent doesn’t
5. child is not filing jointly
6. Child does not estimated taxes paid or refund applied to his 2019 tax year
7. child has no with holdings

Question 9

Kiddie Tax: What are the requirements for applying the Kiddie Tax?

Answer 9

1. at least one parent alive
2. Dependent under the age 19 (24 for students)
3. Has Net Unearned Income

Question 10

Kiddie Tax: What is Net Unearned Income (NUI)?

Answer 10

Unearned Income
- $1100 (First 1100 Clause)
-$1100 (Standard/Itemized Deduction allowed)
\_\_\_\_\_\_\_\_\_\_
NUI

Question 11

What type of income does the Kiddie Tax apply to?

Answer 11

The portion of Unearned Income greater than the automatic allowance of $2200. It does not apply to the the tax on portion of earned income owed.

Question 12

Kiddie Tax: What is the tax rate on the portion income attributed to Kiddie Tax ?

Answer 12

Parents can choose either:

1. parent’s marginal tax rate
2. ordinary and capital gains rates for estates and trusts

Question 13

Kiddie Tax: How is the tax on the Dependent Tax “kiddie tax” return calculated?

Answer 13

Sum of :

1. EI = Regular tax for single filers
2. UI “kiddie tax “= taxed at estate/trust ordinary rates
3. UI “kiddie tax” = taxed at estate/trust capital gain rates

Question 14

Kiddie Tax: Kiddie Tax does NOT apply if:

Answer 14

to an 18 yr old dependent (24 yr old student) with earned income that is > 1/2 of the dependent’s support

Note: a child that provides more than 1/2 their own support is not a QC