December 23, 2009

  • If their only income is earned income (wages) and exceeds $5,700 a tax return is required. Although, if they earn less and have taxes withheld, a tax return would be required to claim a refund.
  • If their only income is un-earned income (investment income) and exceeds $950 a tax return is required or the parents can claim this income on their return. Keep in mind that "kiddie" tax kicks in when investment income exceeds $1,900.
  • When there is a combination of earned and un-earned income, if the un-earned income exceeds $300 and the total gross income exceeds $950, then a tax return is required.
  • For the purposes of filing requirement the gross proceeds from the sale of a security is counted as un-earned income even if there is little or no gain.
  • If the child has net self-employment income of $400 or more a tax return is required.
State filing requirements vary from state to state. At a later date I will talk more about the specific rules regarding "kiddie" tax filing requirements.

(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).