 Can I claim my brother as dependent when we live with our parents? |
My brother is 19, attends school, doesn't/didn't make any income.
My dad's income is too low to provide full support for 3 persons. So I pay support for my brother. Also, I made ... |
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 How much of a return do you get on your tax returns if you own a home? |
| I am about to own my first house in a month or so and I'm paying $156,000 for it. Do I get any extra money in my tax returns for owning a house?... |
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 Can you claim for Work Clothes? |
| a friend at work has told me that you can claim for your work clothes through the tax office. he states that you are entitled to £60 per year and can recieve backpay for the last 6 years. he said it ... |
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 Why did I only get a $300 tax refund? |
| I don't get this at all. I've heard that people that make MORE get a bigger refund (the full $600). So what, keep the poor poor and make the rich more rich? Come on. Am I the only one that ... |
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 The 2008 tax rebate; doesn't make sense to me. You get money now, but you have to pay it back in 2009? |
I understand that the government want us to spend, spend spend right now, but I'll be hurting when I have to pay $1500 extra when I file for 2008 right?
If that is true I think a lot of ... |
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 Is it possible that i would have to pay state income tax to a state that i don't work in? |
| I work in one state and live in another, if i can't zero out my resident state with the credits from my employment state, would i have to pay my resident state income tax when i don't make ... |
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 Do Republicans want the Fair Tax? |
| The Fair Tax is being promoted by John Linder and Neil Boortz. Boortz wrote a book called the Fair Tax Book. The Fair Tax will replace the Federal Income Tax. It's a national sales tax. All ... |
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 When do employers have to have your W2 sent out by? |
| Still waiting on mine, eager to get my refund back.... |
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 Why did I only get $300 form the IRS when i qualify for the full $600? |
| I would like to find out why i only received a $300 refund from the IRS- I thought I would be getting $600 because I filed a single tax return. I am 20 yrs old with no dependants and my parents no ... |
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 Have you recieved you May 9th tax stimulus direct deposit? |
We are supposed to get our stimulus direct deposit on May 9th. It's May 10th and no stimulus. We filed direct deposit when we received our first federal refund.
HOWEVER, we filed ... |
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 Paying taxes, being self-employed? |
| I live in cleveland tn & I deliver newspapers for the times free press. They consider me self-employed since they do not take out taxes. Last year when I did taxes I had only had this job for ... |
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 What happens when you dont file your taxes on time, but you dont owe? is there a fine? |
| when you dont file but you are supposed to be getting money back..is there a fine for filing late or can anything happen if you dont?... |
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 Itemizing my taxes??? |
| I just purchased my first home last month and my morgage broker was telling me that I will have to itemize next year. I have been doing my taxes eversince I started working and have never itemized, ... |
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 Economic Stimulus Rebate Checks? |
| What if you had your IRS check rapid refunded How soon will you get you Economic Stimulus Rebate Check ... |
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ronnin72 | I would like to open a Savings account for my 3 month old Son. Are their tax implications on interest earned? |
I want to open a Bank of America account linked to mine, but he would then have a high interest account (emigrant direct) linked so he could earn 5% on his savings. This is in addition to a 529 I am going to open for him, but gifts made to him personally would go to this savings account, separate from his education fund. Does he have to pay tax on the interest he makes through the years? |
 |
 
TaxMan
|
Regardless of age, if your total income is less than $800, you owe no federal income tax and do not have to file a tax return (I'm assuming your 3 month old does not run their own business).
If your child under 14 earns more than $800 of unearned income (interest, dividends, capital gains, etc.), the next $800 is taxed at 10%. You have the option of doing a tax return for them or entering their unearned income on your tax return (unless your child earns more than $8000 of interest). The form to use is a 8814. Look at the attached links for more information.
Bottom line, the first $800 is tax free and the next $800 is taxed at 10%.
Caveats: This is federal tax information for 2005 only. I don't know if things changed for 2006, nor do I know how your state taxes interest because you didn't give us your state. If it was Pennsylvania, for example, your child would owe tax if the interest was over $32.
Additional:
=======
I just read in the September 13th, 2006 Wall Street Journal that for 2006, the IRS changed the $800 to $850 and the age changes from "under 14" to "under 18". |
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Judy1
 |
Yes, but only if the his total unearned income (which includes the interest, plus interest on any other savings or investments he had) exceeds $800. This was the amount for 2005 - it might rise slightly. But if the interest is under $800, you don't have to file for him, and he won't have to pay any tax on the interest he makes. Money in the 529 doesn't count. |
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skip
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There are rules regarding the amount of unearned income a minor can receive without paying tax at the parent's rate. In the current year, if taxable investment income exceeds $1,700, it must be taxed at the parent's tax rate. This amount is subject to change and is something you must review carefully. I would hope that any investment vehicle would, in time, generate more annual income than the threshold.
The link below may be a useful starting point. See page 11, about half way down the second column.
There is no substitute for professional advice to ensure that you get the maximum tax breaks. Consult a CPA or Enrolled Agent. Be wary of trusting advice you get from a Customer Service Representative at the bank. I have worked for both banks and CPAs and I know who I would trust more with this sort of advice. |
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STEVEN F
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skip and Judy are both correct. The link below is IRS Publication 929, Tax Rules for Children and Dependents. It covers these issues in detail. |
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May I help You?
 |
First I suggest you get a social security number for your son.
If you have this, you may open an account in both of your names, so if you need the money, you may use it for his education and whatever your needs are in the future. You may use his ssn for the tax implications.
529 is tax exempt...can be added to at any time from any source. |
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Dylan
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I'm not entirely sure. It may be specific to state, but I THINK there are no taxes for junior savings accounts attached to those of parents. You could ask a bank or government official. If not, just wait for more answers. If you do ask an official, be sure to mention all details-including that your son is not an adult and his account is attached to yours. Also, it may start being taxed once he becomes an adult, or they may tax your account since he is junior. |
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TIMOTHY D L
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Ask a CPA, but you have many years before this comes up! Believe me, if there is enough to worry about your tax liability, get a professional! They will save you more money than you spend |
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schoolot
 |
No, you have to pay the taxes on the account. The account will be in his name with you as the guardian of the account. All end of the year interest statements will come to you and be applied to you annual income. |
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NovaMattMeade
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Yes, you do but at his tax braquet not yours.
open a UGMA, uniform gift to minors act account, you will pay taxes on the interest earn on the account, but under the son's tax braquet.
Congrats on the son. |
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uncle billy
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only if the earnings become a sum of a few thousand dollars or more |
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