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The “Simplified” Kiddie Tax – Congress Has a Sense of Humor After All

Source: bna.com - Jun 15, 2018

As the 2017 tax act was making its way through Congress, most of us thought that Congress had a goal of simplifying the kiddie tax. Children with unearned income above a certain threshold would no longer be taxed at their parents’ marginal tax rates. Further, each child’s tax would not be dependent upon his siblings and half-siblings.

To be sure, there are certain aspects of the kiddie tax that have made things much easier for parents. For instance, in divorce situations, a parent no longer need worry about obtaining the tax information of an uncooperative “other parent.” However, the actual calculation of the new kiddie tax is anything but “simple.” Reading the Code on the new kiddie tax is like reading a foreign language, even for those of us who are used to reading the Internal Revenue Code.

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Category: General Business