1/19/2024 0 Comments What are the main differences between the flat, regressive, and progressive tax plans?![]() ![]() ![]() To understand the Kiddie Tax, it is important first to be familiar with a couple of U.S. First focused on the unearned income of children under 14, Congress later expanded the tax to include children under 19 and those between 19 and 24 who can be classified as dependent full-time students. This practice shifted unearned income from the wealthy parents’ higher tax bracket to their child’s lower tax bracket. Previously, some wealthy parents sheltered investment income by transferring investment assets into investment accounts owned by their minor children. The Kiddie Tax was initially introduced in the Tax Reform Act of 1986 as a tax on a child’s unearned income. The American Taxpayer Relief Act of 2012 (ATRA) and its accompanying higher tax rates have prompted us to post a Kiddie Tax refresher. Just what is the Kiddie Tax, and how does it affect you and your children? Several years ago, we wrote an article about the Kiddie Tax. See Kiddie Tax Update, dated January 2018 ![]()
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