How early should kids learn about paying taxes? Chances are, it's sooner than you think.
Even if your child is a "dependent" (under the age of 19 or a full-time student under the age of 24, receiving more than half of his or her support from a parent), he or she any be required to file a tax return if:
OR
-
Your child's income is in excess of the basic standard deduction ($4,400 in 2000)
-
Your child's "unearned" income (i.e., from trusts or family partnerships) in excess of $700.
If your child is under 14, you can save the trouble of a second tax return by including his or her income on your tax return, if:
OR
AND
-
Your child's income is less than $7,000,
-
Your child's income is more than $7,000, but all of it is from interest and dividends,
-
Your child had no taxes withheld or made no estimated payments during the year and did not received a refund on a previous year's return.
Want to teach your kids about taxes? Direct them to the Internal Revenue Service's new online magazine for kids, TAXi (Tax Interactive) at:
http://www.irs.ustreas.gov/taxi
