WebFeb 28, 2024 · With the recent law change in calculation of the “kiddie” tax, the $25,000 of financial aid should be taxed at the parent’s 22 percent marginal tax rate, resulting in a savings of (0.37 less 0.22) or .15 times $25,000, or $3,750, in federal income taxes to Benjamin. Benjamin needs to amend his 2024 federal income tax return, requesting a ... WebJan 24, 2024 · The Kiddie Tax applies to most unearned income that a child receives but doesn’t apply to any salary or wages earned by the child, which is taxed at the child’s ordinary rate. For tax year 2024, the Kiddie Tax rule kicks in when a child’s unearned income exceeds $2,200 ($2,300 for tax year 2024). ...
Impact of TCJA on Kiddie Tax - Wipfli
WebMar 7, 2024 · The pre-TCJA rules will be better for some, while Post-TCJA will be better for others. And yes, w hen given a choice, always choose the option that results in a lower tax bill. ... why post-TCJA kiddie tax is HIGHER than. pre-TCJA tax calculated if the parent is in a lower tax bracket (12%) comparing to the Estate and Tax brackets mentioned above. WebThe TCJA temporarily doubled the maximum child tax credit (CTC) from $1,000 to $2,000 per child under 17 and added a $500 nonrefundable credit for children ineligible for the $2,000 credit. The credit decreases by 5 percent of adjusted gross income over $200,000 for single parents and $400,000 for married parents. the shepherds stragglethorpe
The kiddie tax changes, again - Putnam Investments
WebNov 1, 2024 · Editor: Mark G. Cook, CPA, CGMA. The law known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97, delivered tax cuts to families and made American businesses more competitive worldwide.To help offset the major reduction in tax revenue that these changes brought about, the TCJA modified other provisions of the Code, including the tax … WebJan 6, 2024 · The new law modifies the taxation of unearned income of certain children (the “kiddie tax”), effectively repealing the rate changes made to the kiddie tax regime by the 2024 tax law (commonly known as the “Tax Cuts and Jobs Act” or “TCJA”). This change is generally effective for tax years beginning after December 31, 2024. WebJul 23, 2024 · One positive change is the Kiddie Tax, which potentially affects a taxpayer with one or more dependent children who received unearned income during tax year 2024. Overall, the changes to the Kiddie Tax rules are relatively small, and the TCJA streamlined the rules a bit; however, it is still important to look at the overall impact these changes ... the shepherds rest inn campsite