Liberty Tax Outlines The Latest Tax Circumstances That Pertain To Children And Families For Filing A 2008 Tax Return

Franchising.com:

From the cradle to college, children’s lives greatly impact the tax situations of their families. Liberty Tax Service reminds you that for filing a 2008 tax return, there’s a change in the method in which children’s investments are taxed. Any child born on December 31st of 2008 or before can be claimed for the entire year of 2008.

“Also, on a positive tax note, hiring your children as employees in a small business can be advantageous tax-wise,” said John Hewitt, CEO and Founder of Liberty Tax Service.

“Kiddie Tax” Change Affects Children’s Investment Income
Starting in 2008, there’s a change in the age at which children with investment income can be taxed at their parents’ tax rate. Children who are under age 18 at the end of the year will continue to be taxed at the parent’s tax rate. This taxing of investment income at the parent’s tax rate will also apply to a child aged 18 at the end of the year or to a child who was a full-time student, over age 18 and under age 24 at the end of the year, when the child did not have earned income that was more than half of the child’s support. If the child’s interest, dividends, and other investment income total more then $1,800, part of that income may be taxed at the parent’s tax rate instead of at the child’s tax rate.

Dependent’s Exemptionread on.

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