Darn the IRS, Darn Them To Heck

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wintergreen48 · #1 Post by **wintergreen48** » Tue Apr 08, 2008 3:56 pm

I did the taxes for the Young Ones (well, Turbo Tax and I did the taxes for the Young Ones).

Well.

When I drafted Margaret's parents' wills several years ago, they were set up so that what would have been Margaret's share of their estates went instead to the Young Ones, and that gave each of the boys a nice little nest egg; not enough to buy a house (well, enough to buy houses in Detroit, where, apparently, the median price for house sales in February 2008 was less than $25,000), but if they ever do buy houses, they will have something for a down payment.

Well again. Baby Nicholas' income consists entirely of his 'unearned income,' interest on the CDs that he holds from his inheritance. The Wonder Child, on the other hand, has the CD unearned income, plus earnings from a part-time job he had last summer, plus earnings from the Army (his Reserve pay). So what happens is that Nicholas OWES about $700, while the Wonder Child gets a REFUND of a couple hundred dollars (he owes no tax, and gets a refund of all of the money that was withheld from his paychecks). Why the difference??? Because Baby Nicholas is under 18, his 'unearned income' gets taxed in full at my tax rate, whereas the Wonder Child's total income puts him below the poverty line, and so, he pays no income tax at all. Oddly, Nicholas' tax liability will actually go DOWN when he turns 18, even though he will be making more money then (due to part time jobs and such).

I demand tax cuts for minors!!! No taxation without representation (you can't vote if you are under 18)!!!

Well, I am sure that all the money that Nicholas is paying (well, that I am paying, since his money is all tied up in those CDs...) is going to good cause. Can't build enough Bridges to Nowhere, after all...

PlacentiaSoccerMom · #2 Post by **PlacentiaSoccerMom** » Tue Apr 08, 2008 4:28 pm

I demand tax cuts for minors!!! No taxation without representation (you can't vote if you are under 1!!!

I feel your pain.

Maddie had to pay almost $2,000 in AMT taxes on her "unearned" Jeopardy income.

Snaxx · #3 Post by **Snaxx** » Tue Apr 08, 2008 8:33 pm

For some reason (money I guess), Congress recently raised the age threshold for the "kiddie tax" on unearned income from 14 to 18. Soon the age will go up to 23! (for full-time students, 19 otherwise.) I'm 37 and I live 50 miles from my parents, but at this rate I'm afraid my taxes will go up sometime next decade. Then again, my dad is actually in a lower bracket than I. This means my taxes will go down, right? Yeah.

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