What effects will the changes in the Kiddie tax have on my family in 2008?
September 20, 2007

Q: What effects will the changes in the Kiddie tax have on my family in 2008?

A: In 2008 the kiddie tax will apply to children in your household age 19 and younger and children who are fulltime students age 24 and younger. Currently it effects children younger than 18. This year the first $850 of a child's unearned income is tax-free, the next $850 is taxable at their individual rates. Above that, the income is taxable at your rate. So if you have a dependent aged 18-23 you may want to consider triggering a taxable gain at the lower capital gain rate of 5% for gains in excess of $1700. If you wait until 2008 those capital gains rates may likely be 15%

If you have questions, please contact:
Charles B. Jones, Esquire

(410) 752-2468