My kids UTMA income

Jdot
Jdot Member Posts: 3 Newcomer
in Filing my taxes

My kids' got a 1099 from their UTMA accounts showing $1213 in dividends, $7 in interest, a short term gain of $195 and a long term loss of ($79) in their 1099-B. Do they need to file?

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  • KeriC
    KeriC FreeTaxUSA Agent Posts: 218

    @Jdot

    It sounds like you're referring to the Kiddie Tax. Children's investment income under $1300 generally does not need to be reported. See IRS Pub 17 Table 1-2 for more details.

    If you are still unsure, your best option is to use the IRS' interactive tax assistant that can help you determine if they each need to file. You can find it at:

    https://www.irs.gov/help/ita/do-i-need-to-file-a-tax-return

  • Jdot
    Jdot Member Posts: 3 Newcomer

    Thank you! It looks like my kids unearned income exceeds the $1100 threshold so I can either use form 8814 or file individual tax returns for them. I'm not sure if the Free Tax USA program supports form 8814, but I'll dig into it and figure it out. From what I understand if I use form 8814, my kids income will be taxed at my rate, but if I file returns for them they will be taxed at a lower rate.

  • Jdot
    Jdot Member Posts: 3 Newcomer

    So actually they did not have a capital gains distribution so they do not meet the $1300 threshold to use form 8814, but since they are over the $1100 threshold they still must file individual returns. 🙄

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