Wednesday, June 1, 2016

TAX-FREE INCOME FOR CHILDREN - ADVANCE TAX RELIEF www.advancetaxrelief.com

A certain amount of income earned or received by a child is tax free-just how much depend on the child's age.

Parents, grandparents, and other relatives love to give children things like stock, bonds, mutual funds and savings accounts. This property generates investment income - interest, dividends and profits from asset sales. It called "unearned income" because the earner didn't actually have to work at a job or business to make the money.

Although, your child doesn't have to pay tax upon receiving the a gift, the child will be responsible for paying tax on any unearned income the property generates. How this investment income is taxed depends on the childs age - the rules change for children who turn 19 before the end of the year.

Children under 19 don't have to report or pay any tax on their first $900 of income for the year. Their minimum standard deduction is $900. That makes giving children income-producing investments a good strategy for creating a modest amount of tax free income.

If a child under 19 earns between $900 and $1800 in investment income, the child becomes subject to the kiddie tax. Any investment income over $1800 is taxed at the parents highest income tax rate. which can be as high as 35%.

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We are tax relief experts specializing in IRS back tax help, Installment Agreements, tax lien help, wage garnishment release, IRS Offer in Compromises and a whole lot more. Get a free consultation from an experienced tax relief expert today (800)790-8574 or visit our webpage www.advancetaxrelief.com
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