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Free Turbo Tax 2013

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Free Turbo Tax 2013

Free turbo tax 2013 Publication 929 - Main Content Table of Contents Part 1. Free turbo tax 2013 Rules for All Dependents Filing RequirementsEarned Income Only Unearned Income Only Both Earned and Unearned Income Other Filing Requirements Should a Return Be Filed Even If Not Required? Responsibility for Child's ReturnThird party designee. Free turbo tax 2013 Designated as representative. Free turbo tax 2013 IRS notice. Free turbo tax 2013 Standard DeductionStandard Deduction of Zero Dependent's Own Exemption Withholding From WagesExceptions. Free turbo tax 2013 Part 2. Free turbo tax 2013 Tax on Unearned Income of Certain ChildrenWhich Parent's Return To Use Parent's Election To Report Child's Interest and DividendsEffect of Making the Election Figuring Child's Income Figuring Additional Tax Tax for Certain Children Who Have Unearned IncomeProviding Parental Information (Form 8615, Lines A–C) Step 1. Free turbo tax 2013 Figuring the Child's Net Unearned Income (Form 8615, Part I) Step 2. Free turbo tax 2013 Figuring a Tentative Tax at the Parent's Tax Rate (Form 8615, Part II) Step 3. Free turbo tax 2013 Figuring the Child's Tax (Form 8615, Part III) Alternative Minimum Tax Illustrated Example Part 1. Free turbo tax 2013 Rules for All Dependents This part of the publication discusses the filing requirements for dependents, who is responsible for a child's return, how to figure a dependent's standard deduction and exemption (if any), and whether a dependent can claim exemption from federal income tax withholding. Free turbo tax 2013 Filing Requirements Whether a dependent has to file a return generally depends on the amount of the dependent's earned and unearned income and whether the dependent is married, is age 65 or older, or is blind. Free turbo tax 2013 A dependent may have to file a return even if his or her income is less than the amount that would normally require a return. Free turbo tax 2013 See Other Filing Requirements, later. Free turbo tax 2013 The following sections apply to dependents with: Earned income only, Unearned income only, and Both earned and unearned income. Free turbo tax 2013  To find out whether a dependent must file, read the section that applies, or use Table 1. Free turbo tax 2013 Earned Income Only A dependent whose gross income is only earned income must file a return if the gross income is more than the amount listed in the following table. Free turbo tax 2013 Marital Status Amount Single   Under 65 and not blind $6,100 Either 65 or older or blind $7,600 65 or older and blind $9,100 Married*   Under 65 and not blind $6,100 Either 65 or older or blind $7,300 65 or older and blind $8,500 *If a dependent's spouse itemizes deductions on a separate return, the dependent must file a return if the dependent has $5 or more of gross income (earned and/or unearned). Free turbo tax 2013 Example. Free turbo tax 2013 William is 16. Free turbo tax 2013 His mother claims an exemption for him on her income tax return. Free turbo tax 2013 He worked part time on weekends during the school year and full time during the summer. Free turbo tax 2013 He earned $7,000 in wages. Free turbo tax 2013 He did not have any unearned income. Free turbo tax 2013 He must file a tax return because he has earned income only and his gross income is more than $6,100. Free turbo tax 2013 If he is blind, he does not have to file a return because his gross income is not more than $7,600. Free turbo tax 2013 Unearned Income Only A dependent whose gross income is only unearned income must file a return if the gross income is more than the amount listed in the following table. Free turbo tax 2013 Marital Status Amount Single   Under 65 and not blind $1,000 Either 65 or older or blind $2,500 65 or older and blind $4,000 Married*   Under 65 and not blind $1,000 Either 65 or older or blind $2,200 65 or older and blind $3,400 *If a dependent's spouse itemizes deductions on a separate return, the dependent must file a return if the dependent has $5 or more of gross income (earned and/or unearned). Free turbo tax 2013 Example. Free turbo tax 2013 Sarah is 18 and single. Free turbo tax 2013 Her parents can claim an exemption for her on their income tax return. Free turbo tax 2013 She received $1,970 of taxable interest and dividend income. Free turbo tax 2013 She did not work during the year. Free turbo tax 2013 She must file a tax return because she has unearned income only and her gross income is more than $1,000. Free turbo tax 2013 If she is blind, she does not have to file a return because she has unearned income only and her gross income is not more than $2,500. Free turbo tax 2013 Election to report child's unearned income on parent's return. Free turbo tax 2013   A parent of a child under age 19 (or under age 24 if a full-time student) may be able to elect to include the child's interest and dividend income on the parent's return. Free turbo tax 2013 See Parent's Election To Report Child's Interest and Dividends in Part 2. Free turbo tax 2013 If the parent makes this election, the child does not have to file a return. Free turbo tax 2013 Both Earned and Unearned Income A dependent who has both earned and unearned income generally must file a return if the dependent's gross income is more than line 5 of the following worksheet. Free turbo tax 2013 Filing Requirement Worksheet for Most Dependents 1. Free turbo tax 2013 Enter dependent's earned income plus $350     2. Free turbo tax 2013 Minimum amount   $1,000 3. Free turbo tax 2013 Compare lines 1 and 2. Free turbo tax 2013 Enter the larger amount     4. Free turbo tax 2013 Maximum amount   6,100 5. Free turbo tax 2013 Compare lines 3 and 4. Free turbo tax 2013 Enter the smaller amount     6. Free turbo tax 2013 Enter the dependent's gross income. Free turbo tax 2013 If line 6 is more than line 5, the dependent must file an income tax return. Free turbo tax 2013 If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 6 is $5 or more. Free turbo tax 2013       Table 1. Free turbo tax 2013 2013 Filing Requirements for Dependents If your parent (or someone else) can claim you as a dependent, use this table to see if you must file a return. Free turbo tax 2013   See the definitions of “dependent,”“earned income,”“unearned income,” and “gross income” in the Glossary. Free turbo tax 2013   Single dependents—Were you either age 65 or older or blind?     No. Free turbo tax 2013 You must file a return if any of the following apply. Free turbo tax 2013       Your unearned income was over $1,000. Free turbo tax 2013 Your earned income was over $6,100. Free turbo tax 2013 Your gross income was more than the larger of—       $1,000, or Your earned income (up to $5,750) plus $350. Free turbo tax 2013         Yes. Free turbo tax 2013 You must file a return if any of the following apply. Free turbo tax 2013     Your unearned income was over $2,500 ($4,000 if 65 or older and blind), Your earned income was over $7,600 ($9,100 if 65 or older and blind), Your gross income was more than the larger of—       $2,500 ($4,000 if 65 or older and blind), or Your earned income (up to $5,750) plus $1,850 ($3,350 if 65 or older and blind). Free turbo tax 2013       Married dependents—Were you either age 65 or older or blind?     No. Free turbo tax 2013 You must file a return if any of the following apply. Free turbo tax 2013       Your gross income was at least $5 and your spouse files a separate return and itemizes deductions. Free turbo tax 2013 Your unearned income was over $1,000. Free turbo tax 2013 Your earned income was over $6,100. Free turbo tax 2013 Your gross income was more than the larger of—       $1,000, or Your earned income (up to $5,750) plus $350. Free turbo tax 2013       Yes. Free turbo tax 2013 You must file a return if any of the following apply. Free turbo tax 2013       Your gross income was at least $5 and your spouse files a separate return and itemizes deductions. Free turbo tax 2013 Your unearned income was over $2,200 ($3,400 if 65 or older and blind), Your earned income was over $7,300 ($8,500 if 65 or older and blind), Your gross income was more than the larger of—       $2,200 ($3,400 if 65 or older and blind), or Your earned income (up to $5,750) plus $1,550 ($2,750 if 65 or older and blind). Free turbo tax 2013       Example 1. Free turbo tax 2013 Joe is 20, single, not blind, and a full-time college student. Free turbo tax 2013 He does not provide more than half of his own support, and his parents claim an exemption for him on their income tax return. Free turbo tax 2013 He received $200 taxable interest income and earned $2,750 from a part-time job. Free turbo tax 2013 He does not have to file a tax return because his gross income of $2,950 ($200 interest plus $2,750 in wages) is not more than $3,100, the amount on line 5 of his filled-in Filing Requirement Worksheet for Most Dependents (shown next). Free turbo tax 2013 Filled-in Example 1 Filing Requirement Worksheet  for Most Dependents 1. Free turbo tax 2013 Enter dependent's earned income plus $350   $ 3,100 2. Free turbo tax 2013 Minimum amount   1,000 3. Free turbo tax 2013 Compare lines 1 and 2. Free turbo tax 2013 Enter the larger amount   3,100 4. Free turbo tax 2013 Maximum amount   6,100 5. Free turbo tax 2013 Compare lines 3 and 4. Free turbo tax 2013 Enter the smaller amount   3,100 6. Free turbo tax 2013 Enter the dependent's gross income. Free turbo tax 2013 If line 6 is more than line 5, the dependent must file an income tax return. Free turbo tax 2013 If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 6 is $5 or more. Free turbo tax 2013   $ 2,950   Example 2. Free turbo tax 2013 The facts are the same as in Example 1 except that Joe had $600 taxable interest income. Free turbo tax 2013 He must file a tax return because his gross income of $3,350 ($600 interest plus $2,750 wages) is more than $3,100, the amount on line 5 of his filled-in worksheet (shown next). Free turbo tax 2013 Filled-in Example 2 Filing Requirement Worksheet for Most Dependents 1. Free turbo tax 2013 Enter dependent's earned income plus $350   $ 3,100 2. Free turbo tax 2013 Minimum amount   1,000 3. Free turbo tax 2013 Compare lines 1 and 2. Free turbo tax 2013 Enter the larger amount   3,100 4. Free turbo tax 2013 Maximum amount   6,100 5. Free turbo tax 2013 Compare lines 3 and 4. Free turbo tax 2013 Enter the smaller amount   3,100 6. Free turbo tax 2013 Enter the dependent's gross income. Free turbo tax 2013 If line 6 is more than line 5, the dependent must file an income tax return. Free turbo tax 2013 If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 6 is $5 or more. Free turbo tax 2013   $ 3,350   Age 65 or older or blind. Free turbo tax 2013 A dependent who is age 65 or older or blind must file a return if his or her gross income is more than line 7 of the following worksheet. Free turbo tax 2013 Filing Requirement Worksheet  for Dependents Who Are Age 65 or Older or Blind 1. Free turbo tax 2013 Enter dependent's earned income plus $350     2. Free turbo tax 2013 Minimum amount   $1,000 3. Free turbo tax 2013 Compare lines 1 and 2. Free turbo tax 2013 Enter the larger amount     4. Free turbo tax 2013 Maximum amount   6,100 5. Free turbo tax 2013 Compare lines 3 and 4. Free turbo tax 2013 Enter the smaller amount     6. Free turbo tax 2013 Enter the amount from the following table that applies to the dependent       Marital Status Amount     Single         Either 65 or older or blind $1,500       65 or older and blind $3,000     Married         Either 65 or older or blind $1,200       65 or older and blind $2,400   7. Free turbo tax 2013 Add lines 5 and 6. Free turbo tax 2013 Enter the total     8. Free turbo tax 2013 Enter the dependent's gross income. Free turbo tax 2013 If line 8 is more than line 7, the dependent must file an income tax return. Free turbo tax 2013 If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 8 is $5 or more     Example 3. Free turbo tax 2013 The facts are the same as in Example 2 except that Joe is also blind. Free turbo tax 2013 He does not have to file a return because his gross income of $3,350 is not more than $4,600, the amount on line 7 of his filled-in Filing Requirement Worksheet for Dependents Who Are Age 65 or Older or Blind (shown next). Free turbo tax 2013   Filled-in Example 3 Filing Requirement Worksheet  for Dependents Who Are Age 65 or Older or Blind 1. Free turbo tax 2013 Enter dependent's earned income plus $350   $3,100 2. Free turbo tax 2013 Minimum amount   1,000 3. Free turbo tax 2013 Compare lines 1 and 2. Free turbo tax 2013 Enter the larger amount   3,100 4. Free turbo tax 2013 Maximum amount   6,100 5. Free turbo tax 2013 Compare lines 3 and 4. Free turbo tax 2013 Enter the smaller amount   3,100 6. Free turbo tax 2013 Enter the amount from the following table that applies to the dependent   1,500   Marital Status Amount     Single         Either 65 or older or blind $1,500       65 or older and blind $3,000     Married         Either 65 or older or blind $1,200       65 or older and blind $2,400   7. Free turbo tax 2013 Add lines 5 and 6. Free turbo tax 2013 Enter the total   4,600 8. Free turbo tax 2013 Enter the dependent's gross income. Free turbo tax 2013 If line 8 is more than line 7, the dependent must file an income tax return. Free turbo tax 2013 If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 8 is $5 or more   $3,350 Other Filing Requirements Some dependents may have to file a tax return even if their income is less than the amount that would normally require them to file a return. Free turbo tax 2013 A dependent must file a tax return if he or she owes any other taxes, such as: Social security and Medicare taxes on tips not reported to his or her employer or on wages received from an employer who did not withhold these taxes, Uncollected social security and Medicare or railroad retirement taxes on tips reported to his or her employer or on group-term life insurance, Alternative minimum tax, Additional tax on a health savings account from Form 8889, Part III, Recapture taxes, such as the tax from recapture of an education credit, or Additional tax on a qualified plan, including an individual retirement arrangement (IRA), or other tax-favored account. Free turbo tax 2013 But if the dependent is filing a return only because of this tax, the dependent can file Form 5329 by itself. Free turbo tax 2013 A dependent must also file a tax return if he or she: Had wages of $108. Free turbo tax 2013 28 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes, or Had net earnings from self-employment of at least $400. Free turbo tax 2013 Spouse itemizes. Free turbo tax 2013   A dependent must file a return if the dependent's spouse itemizes deductions on a separate return and the dependent has $5 or more of gross income (earned and/or unearned). Free turbo tax 2013 Should a Return Be Filed Even If Not Required? Even if a dependent does not meet any of the filing requirements discussed earlier, he or she should file a tax return if either of the following applies. Free turbo tax 2013 Income tax was withheld from his or her income. Free turbo tax 2013 He or she qualifies for the earned income credit, additional child tax credit, health coverage tax credit, or refundable American opportunity education credit. Free turbo tax 2013 See the tax return instructions to find out who qualifies for these credits. Free turbo tax 2013  By filing a return, the dependent can get a refund. Free turbo tax 2013 Responsibility for Child's Return Generally, a child is responsible for filing his or her own tax return and for paying any tax, penalties, or interest on that return. Free turbo tax 2013 If a child cannot file his or her own return for any reason, such as age, the child's parent, guardian, or other legally responsible person must file it for the child. Free turbo tax 2013 Signing the child's return. Free turbo tax 2013   If the child cannot sign his or her return, a parent or guardian must sign the child's name followed by the words “By (signature), parent (or guardian) for minor child. Free turbo tax 2013 ” Authority of parent or guardian. Free turbo tax 2013   A parent or guardian who signs a return on a child's behalf can deal with the IRS on all matters connected with the return. Free turbo tax 2013   In general, a parent or guardian who does not sign the child's return can only provide information concerning the child's return and pay the child's tax. Free turbo tax 2013 That parent or guardian is not entitled to receive information from the IRS or legally bind the child to a tax liability arising from the return. Free turbo tax 2013 Third party designee. Free turbo tax 2013   A child's parent or guardian who does not sign the child's return may be authorized, as a third party designee, to discuss the processing of the return with the IRS as well as provide information concerning the return. Free turbo tax 2013 The child or the person signing the return on the child's behalf must check the “Yes” box in the “Third Party Designee” area of the return and name the parent or guardian as the designee. Free turbo tax 2013   If designated, a parent or guardian can respond to certain IRS notices and receive information about the processing of the return and the status of a refund or payment. Free turbo tax 2013 This designation does not authorize the parent or guardian to receive any refund check, bind the child to any tax liability, or otherwise represent the child before the IRS. Free turbo tax 2013 See the return instructions for more information. Free turbo tax 2013 Designated as representative. Free turbo tax 2013   A parent or guardian who does not sign the child's return may be designated as the child's representative by the child or the person signing the return on the child's behalf. Free turbo tax 2013 Form 2848, Power of Attorney and Declaration of Representative, is used to designate a child's representative. Free turbo tax 2013 See Publication 947, Practice Before the IRS and Power of Attorney, for more information. Free turbo tax 2013   If designated, a parent or guardian can receive information about the child's return but cannot legally bind the child to a tax liability unless authorized to do so by the law of the state in which the child lives. Free turbo tax 2013 IRS notice. Free turbo tax 2013   If you or the child receives a notice from the IRS concerning the child's return or tax liability, you should immediately inform the IRS that the notice concerns a child. Free turbo tax 2013 The notice will show who to contact. Free turbo tax 2013 The IRS will try to resolve the matter with the parent(s) or guardian(s) of the child consistent with their authority. Free turbo tax 2013 Child's earnings. Free turbo tax 2013   For federal income tax purposes, amounts a child earns by performing services are included in the gross income of the child and not the gross income of the parent. Free turbo tax 2013 This is true even if, under state law, the parent has the right to the earnings and may actually have received them. Free turbo tax 2013 If the child does not pay the tax due on this income, the parent may be liable for the tax. Free turbo tax 2013 Child's expenses. Free turbo tax 2013   Deductions for payments that are made out of a child's earnings are the child's, even if the payments are made by the parent. Free turbo tax 2013 Example. Free turbo tax 2013 You made payments on your child's behalf that are deductible as a business expense and a charitable contribution. Free turbo tax 2013 You made the payments out of your child's earnings. Free turbo tax 2013 These items can be deducted only on the child's return. Free turbo tax 2013 Standard Deduction The standard deduction for an individual who can be claimed as a dependent on another person's tax return is generally limited to the larger of: $1,000, or The individual's earned income plus $350, but not more than the regular standard deduction (generally $6,100). Free turbo tax 2013 However, the standard deduction may be higher for a dependent who: Is 65 or older, or Is blind. Free turbo tax 2013 Certain dependents cannot claim any standard deduction. Free turbo tax 2013 See Standard Deduction of Zero , later. Free turbo tax 2013 Worksheet 1. Free turbo tax 2013   Use Worksheet 1 to figure the dependent's standard deduction. Free turbo tax 2013 Worksheet 1. Free turbo tax 2013 Standard Deduction Worksheet for Dependents Use this worksheet only if someone else can claim you (or your spouse, if filing jointly) as a dependent. Free turbo tax 2013 If you were 65 or older and/or blind, check the correct number of boxes below. Free turbo tax 2013 Put the total number of boxes checked in box c and go to line 1. Free turbo tax 2013 a. Free turbo tax 2013 You 65 or older   Blind   b. Free turbo tax 2013 Your spouse, if claiming  spouse's exemption 65 or older   Blind   c. Free turbo tax 2013 Total boxes checked         1. Free turbo tax 2013 Enter your earned income (defined below) plus $350. Free turbo tax 2013 If none, enter -0-. Free turbo tax 2013 1. Free turbo tax 2013     2. Free turbo tax 2013 Minimum amount. Free turbo tax 2013   2. Free turbo tax 2013 $1,000   3. Free turbo tax 2013 Compare lines 1 and 2. Free turbo tax 2013 Enter the larger of the two amounts here. Free turbo tax 2013 3. Free turbo tax 2013     4. Free turbo tax 2013 Enter on line 4 the amount shown below for your filing status. Free turbo tax 2013       Single or Married filing separately—$6,100 Married filing jointly—$12,200 Head of household—$8,950 4. Free turbo tax 2013     5. Free turbo tax 2013 Standard deduction. Free turbo tax 2013         a. Free turbo tax 2013 Compare lines 3 and 4. Free turbo tax 2013 Enter the smaller amount here. Free turbo tax 2013 If under 65 and not blind, stop here. Free turbo tax 2013 This is your standard deduction. Free turbo tax 2013 Otherwise, go on to line 5b. Free turbo tax 2013 5a. Free turbo tax 2013     b. Free turbo tax 2013 If 65 or older or blind, multiply $1,500 ($1,200 if married) by the number in box c above. Free turbo tax 2013 Enter the result here. Free turbo tax 2013 5b. Free turbo tax 2013     c. Free turbo tax 2013 Add lines 5a and 5b. Free turbo tax 2013 This is your standard deduction for 2013. Free turbo tax 2013 5c. Free turbo tax 2013     Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. Free turbo tax 2013 It also includes any amount received as a scholarship that you must include in income. Free turbo tax 2013   Example 1. Free turbo tax 2013 Michael is single, age 15, and not blind. Free turbo tax 2013 His parents can claim him as a dependent on their tax return. Free turbo tax 2013 He has taxable interest income of $800 and wages of $150. Free turbo tax 2013 He enters $500 (his earned income plus $350) on line 1 of Worksheet 1. Free turbo tax 2013 On line 3, he enters $1,000, the larger of $500 or $1,000. Free turbo tax 2013 Michael enters $6,100 on line 4. Free turbo tax 2013 On line 5a, he enters $1,000, the smaller of $1,000 or $6,100. Free turbo tax 2013 His standard deduction is $1,000. Free turbo tax 2013 Example 2. Free turbo tax 2013 Judy, a full-time student, is single, age 22, and not blind. Free turbo tax 2013 Her parents can claim her as a dependent on their tax return. Free turbo tax 2013 She has dividend income of $275 and wages of $2,500. Free turbo tax 2013 She enters $2,850 (her earned income plus $350) on line 1 of Worksheet 1. Free turbo tax 2013 On line 3, she enters $2,850, the larger of $2,850 or $1,000. Free turbo tax 2013 She enters $6,100 on line 4. Free turbo tax 2013 On line 5a, she enters $2,850 (the smaller of $2,850 or $6,100) as her standard deduction. Free turbo tax 2013 Example 3. Free turbo tax 2013 Amy, who is single, is claimed as a dependent on her parents' tax return. Free turbo tax 2013 She is 18 years old and blind. Free turbo tax 2013 She has taxable interest income of $1,000 and wages of $2,000. Free turbo tax 2013 She enters $2,350 (her earned income plus $350) on line 1 of Worksheet 1. Free turbo tax 2013 She enters $2,350 (the larger of $2,350 or $1,000) on line 3, $6,100 on line 4, and $2,350 (the smaller of $2,350 or $6,100) on line 5a. Free turbo tax 2013 Because Amy is blind, she checks the box for blindness and enters “1” in box c at the top of Worksheet 1. Free turbo tax 2013 She enters $1,500 (the number in box c times $1,500) on line 5b. Free turbo tax 2013 Her standard deduction on line 5c is $3,850 ($2,350 + $1,500). Free turbo tax 2013 Standard Deduction of Zero The standard deduction for the following dependents is zero. Free turbo tax 2013 A married dependent filing a separate return whose spouse itemizes deductions. Free turbo tax 2013 A dependent who files a return for a period of less than 12 months due to a change in his or her annual accounting period. Free turbo tax 2013 A nonresident or dual-status alien dependent, unless the dependent is married to a U. Free turbo tax 2013 S. Free turbo tax 2013 citizen or resident alien at the end of the year and chooses to be treated as a U. Free turbo tax 2013 S. Free turbo tax 2013 resident for the year. Free turbo tax 2013 See Publication 519, U. Free turbo tax 2013 S. Free turbo tax 2013 Tax Guide for Aliens, for information on making this choice. Free turbo tax 2013 Example. Free turbo tax 2013 Jennifer, who is a dependent of her parents, is entitled to file a joint return with her husband. Free turbo tax 2013 However, her husband elects to file a separate return and itemize his deductions. Free turbo tax 2013 Because he itemizes, Jennifer's standard deduction on her return is zero. Free turbo tax 2013 She can, however, itemize any of her allowable deductions. Free turbo tax 2013 Dependent's Own Exemption A person who can be claimed as a dependent on another taxpayer's return cannot claim his or her own exemption. Free turbo tax 2013 This is true even if the other taxpayer does not actually claim the exemption. Free turbo tax 2013 Example. Free turbo tax 2013 James and Barbara can claim their child, Ben, as a dependent on their return. Free turbo tax 2013 Ben is a college student who works during the summer and must file a tax return. Free turbo tax 2013 Ben cannot claim his own exemption on his return. Free turbo tax 2013 This is true even if James and Barbara do not claim him as a dependent on their return. Free turbo tax 2013 Withholding From Wages Employers generally withhold federal income tax, social security tax, and Medicare tax from an employee's wages. Free turbo tax 2013 If the employee claims exemption from withholding on Form W-4, the employer will not withhold federal income tax. Free turbo tax 2013 The exemption from withholding does not apply to social security and Medicare taxes. Free turbo tax 2013 Conditions for exemption from withholding. Free turbo tax 2013   An employee can claim exemption from withholding for 2014 only if he or she meets both of the following conditions. Free turbo tax 2013 For 2013, the employee had a right to a refund of all federal income tax withheld because he or she had no tax liability. Free turbo tax 2013 For 2014, the employee expects a refund of all federal income tax withheld because he or she expects to have no tax liability. Free turbo tax 2013 Dependents. Free turbo tax 2013   An employee who is a dependent ordinarily cannot claim exemption from withholding if both of the following are true. Free turbo tax 2013 The employee's gross income will be more than $1,000, the minimum standard deduction for 2014. Free turbo tax 2013 The employee's unearned income will be more than $350. Free turbo tax 2013 Exceptions. Free turbo tax 2013   An employee may be able to claim exemption from withholding even if the employee is a dependent, if the employee: Is age 65 or older, Is blind, or Will claim on his or her 2014 tax return: Adjustments to income, Tax credits, or Itemized deductions. Free turbo tax 2013 The above exceptions do not apply to supplemental wages greater than $1,000,000. Free turbo tax 2013 For more information, see Exemption From Withholding in chapter 1 of Publication 505. Free turbo tax 2013 Example. Free turbo tax 2013 Guy is 17 and a student. Free turbo tax 2013 During the summer he works part time at a grocery store. Free turbo tax 2013 He expects to earn about $1,200 this year. Free turbo tax 2013 He also worked at the store last summer and received a refund of all his withheld income tax because he did not have a tax liability. Free turbo tax 2013 The only other income he expects during the year is $375 interest on a savings account. Free turbo tax 2013 He expects that his parents will be able to claim him as a dependent on their tax return. Free turbo tax 2013 He is not blind and will not claim adjustments to income, itemized deductions, a higher standard deduction, or tax credits on his return. Free turbo tax 2013 Guy cannot claim exemption from withholding when he fills out Form W-4 because his parents will be able to claim him as a dependent, his gross income will be more than $1,000 (the minimum standard deduction amount) and his unearned income will be more than $350. Free turbo tax 2013 Claiming exemption from withholding. Free turbo tax 2013    To claim exemption from withholding, an employee must enter “Exempt” in the space provided on Form W-4, line 7. Free turbo tax 2013 The employee must complete the rest of the form, as explained in the form instructions, and give it to his or her employer. Free turbo tax 2013 Renewing an exemption from withholding. Free turbo tax 2013   An exemption from withholding is good for only one year. Free turbo tax 2013 An employee must file a new Form W-4 by February 15 each year to continue the exemption. Free turbo tax 2013 Part 2. Free turbo tax 2013 Tax on Unearned Income of Certain Children The two rules that follow may affect the tax on the unearned income of certain children. Free turbo tax 2013 If the child's interest and dividend income (including capital gain distributions) total less than $10,000, the child's parent may be able to choose to include that income on the parent's return rather than file a return for the child. Free turbo tax 2013 (See Parent's Election To Report Child's Interest and Dividends , later. Free turbo tax 2013 ) If the child's interest, dividends, and other unearned income total more than $2,000, part of that income may be taxed at the parent's tax rate instead of the child's tax rate. Free turbo tax 2013 (See Tax for Certain Children Who Have Unearned Income , later. Free turbo tax 2013 ) For these rules, the term “child” includes a legally adopted child and a stepchild. Free turbo tax 2013 These rules apply whether or not the child is a dependent. Free turbo tax 2013 These rules do not apply if neither of the child's parents were living at the end of the year. Free turbo tax 2013 Which Parent's Return To Use If a child's parents are married to each other and file a joint return, use the joint return to figure the tax on the child's unearned income. Free turbo tax 2013 The tax rate and other return information from that return are used to figure the child's tax as explained later under Tax for Certain Children Who Have Unearned Income . Free turbo tax 2013 Parents Who Do Not File a Joint Return For parents who do not file a joint return, the following discussions explain which parent's tax return must be used to figure the tax. Free turbo tax 2013 Only the parent whose tax return is used can make the election described under Parent's Election To Report Child's Interest and Dividends . Free turbo tax 2013 Parents are married. Free turbo tax 2013   If the child's parents file separate returns, use the return of the parent with the greater taxable income. Free turbo tax 2013 Parents not living together. Free turbo tax 2013   If the child's parents are married to each other but not living together, and the parent with whom the child lives (the custodial parent) is considered unmarried, use the return of the custodial parent. Free turbo tax 2013 If the custodial parent is not considered unmarried, use the return of the parent with the greater taxable income. Free turbo tax 2013   For an explanation of when a married person living apart from his or her spouse is considered unmarried, see Head of Household in Publication 501. Free turbo tax 2013 Parents are divorced. Free turbo tax 2013   If the child's parents are divorced or legally separated, and the parent who had custody of the child for the greater part of the year (the custodial parent) has not remarried, use the return of the custodial parent. Free turbo tax 2013 Custodial parent remarried. Free turbo tax 2013   If the custodial parent has remarried, the stepparent (rather than the noncustodial parent) is treated as the child's other parent. Free turbo tax 2013 Therefore, if the custodial parent and the stepparent file a joint return, use that joint return. Free turbo tax 2013 Do not use the return of the noncustodial parent. Free turbo tax 2013   If the custodial parent and the stepparent are married, but file separate returns, use the return of the one with the greater taxable income. Free turbo tax 2013 If the custodial parent and the stepparent are married but not living together, the earlier discussion under Parents not living together applies. Free turbo tax 2013 Parents never married. Free turbo tax 2013   If a child's parents have never been married to each other, but lived together all year, use the return of the parent with the greater taxable income. Free turbo tax 2013 If the parents did not live together all year, the rules explained earlier under Parents are divorced apply. Free turbo tax 2013 Widowed parent remarried. Free turbo tax 2013   If a widow or widower remarries, the new spouse is treated as the child's other parent. Free turbo tax 2013 The rules explained earlier under Custodial parent remarried apply. Free turbo tax 2013 Parent's Election To Report Child's Interest and Dividends You may be able to elect to include your child's interest and dividend income (including capital gain distributions) on your tax return. Free turbo tax 2013 If you do, your child will not have to file a return. Free turbo tax 2013 You can make this election only if all the following conditions are met. Free turbo tax 2013 Your child was under age 19 (or under age 24 if a full-time student) at the end of the year. Free turbo tax 2013 Your child had income only from interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends). Free turbo tax 2013 The child's gross income was less than $10,000. Free turbo tax 2013 The child is required to file a return unless you make this election. Free turbo tax 2013 The child does not file a joint return for the year. Free turbo tax 2013 No estimated tax payment was made for the year, and no overpayment from the previous year (or from any amended return) was applied to this year under your child's name and social security number. Free turbo tax 2013 No federal income tax was withheld from your child's income under the backup withholding rules. Free turbo tax 2013 You are the parent whose return must be used when applying the special tax rules for children. Free turbo tax 2013 (See Which Parent's Return To Use , earlier. Free turbo tax 2013 ) These conditions are also shown in Figure 1. Free turbo tax 2013 Certain January 1 birthdays. Free turbo tax 2013   A child born on January 1, 1995, is considered to be age 19 at the end of 2013. Free turbo tax 2013 You cannot make this election for such a child unless the child was a full-time student. Free turbo tax 2013   A child born on January 1, 1990, is considered to be age 24 at the end of 2013. Free turbo tax 2013 You cannot make this election for such a child. Free turbo tax 2013 How to make the election. Free turbo tax 2013    Make the election by attaching Form 8814 to your Form 1040 or Form 1040NR. Free turbo tax 2013 (If you make this election, you cannot file Form 1040A or Form 1040EZ. Free turbo tax 2013 ) Attach a separate Form 8814 for each child for whom you make the election. Free turbo tax 2013 You can make the election for one or more children and not for others. Free turbo tax 2013 Effect of Making the Election The federal income tax on your child's income may be more if you make the Form 8814 election. Free turbo tax 2013 Rate may be higher. Free turbo tax 2013   If your child received qualified dividends or capital gain distributions, you may pay up to $100 more tax if you make this election instead of filing a separate tax return for the child. Free turbo tax 2013 This is because the tax rate on the child's income between $1,000 and $2,000 is 10% if you make this election. Free turbo tax 2013 However, if you file a separate return for the child, the tax rate may be as low as 0% (zero percent) because of the preferential tax rates for qualified dividends and capital gain distributions. Free turbo tax 2013 Deductions you cannot take. Free turbo tax 2013   By making the Form 8814 election, you cannot take any of the following deductions that the child would be entitled to on his or her return. Free turbo tax 2013 The additional standard deduction if the child is blind. Free turbo tax 2013 The deduction for a penalty on an early withdrawal of your child's savings. Free turbo tax 2013 Itemized deductions (such as your child's investment expenses or charitable contributions). Free turbo tax 2013 Figure 1. Free turbo tax 2013 Can You Include Your Child's Income On Your Tax Return? Please click here for the text description of the image. Free turbo tax 2013 Figure 1. Free turbo tax 2013 Can You Include Your Child's Income On Your Tax Return? Deductible investment interest. Free turbo tax 2013   If you use Form 8814, your child's unearned income is considered your unearned income. Free turbo tax 2013 To figure the limit on your deductible investment interest, add the child's unearned income to yours. Free turbo tax 2013 However, if your child received qualified dividends, capital gain distributions, or Alaska Permanent Fund dividends, see chapter 3 of Publication 550 for information about how to figure the limit. Free turbo tax 2013 Alternative minimum tax. Free turbo tax 2013    If your child received tax-exempt interest (or exempt-interest dividends paid by a regulated investment company) from certain private activity bonds, you must determine if that interest is a tax preference item for alternative minimum tax (AMT) purposes. Free turbo tax 2013 If it is, you must include it with your own tax preference items when figuring your AMT. Free turbo tax 2013 See Form 6251, Alternative Minimum Tax—Individuals, and its instructions for details. Free turbo tax 2013 Reduced deductions or credits. Free turbo tax 2013   If you use Form 8814, your increased adjusted gross income may reduce certain deductions or credits on your return, including the following. Free turbo tax 2013 Deduction for contributions to a traditional individual retirement arrangement (IRA). Free turbo tax 2013 Deduction for student loan interest. Free turbo tax 2013 Itemized deductions for medical expenses, casualty and theft losses, and certain miscellaneous expenses. Free turbo tax 2013 Credit for child and dependent care expenses. Free turbo tax 2013 Child tax credit. Free turbo tax 2013 Education tax credits. Free turbo tax 2013 Earned income credit. Free turbo tax 2013 Penalty for underpayment of estimated tax. Free turbo tax 2013   If you make this election for 2013 and did not have enough tax withheld or pay enough estimated tax to cover the tax you owe, you may be subject to a penalty. Free turbo tax 2013 If you plan to make this election for 2014, you may need to increase your federal income tax withholding or your estimated tax payments to avoid the penalty. Free turbo tax 2013 Get Publication 505 for more information. Free turbo tax 2013 Figuring Child's Income Use Form 8814, Part I, to figure your child's interest and dividend income to report on your return. Free turbo tax 2013 Only the amount over $2,000 is added to your income. Free turbo tax 2013 The amount over $2,000 is shown on Form 8814, line 6. Free turbo tax 2013 Unless the child's income includes qualified dividends or capital gain distributions (discussed next), the same amount is shown on Form 8814, line 12. Free turbo tax 2013 Include the amount from Form 8814, line 12, on Form 1040 or Form 1040NR, line 21. Free turbo tax 2013 If you file more than one Form 8814, include the total amounts from line 12 of all your Forms 8814 on Form 1040 or Form 1040NR, line 21. Free turbo tax 2013 On the dotted line next to line 21, enter “Form 8814” and the total of the Form 8814, line 12 amounts. Free turbo tax 2013 Note. Free turbo tax 2013 The tax on the first $2,000 is figured on Form 8814, Part II. Free turbo tax 2013 See Figuring Additional Tax , later. Free turbo tax 2013 Qualified dividends. Free turbo tax 2013   Enter on Form 8814, line 2a, any ordinary dividends your child received. Free turbo tax 2013 This amount may include qualified dividends. Free turbo tax 2013 Qualified dividends are those dividends reported on Form 1040, line 9b, or Form 1040NR, line 10b, and are eligible for lower tax rates that apply to a net capital gain. Free turbo tax 2013 For detailed information about qualified dividends, see Publication 550. Free turbo tax 2013   If your child received qualified dividends, the amount of these dividends that is added to your income must be reported on Form 1040, lines 9a and 9b, or Form 1040NR, lines 10a and 10b. Free turbo tax 2013 You do not include these dividends on Form 8814, line 12, or on line 21 of Form 1040 or Form 1040NR. Free turbo tax 2013   Enter the child's qualified dividends on Form 8814, line 2b. Free turbo tax 2013 But do not include this amount on Form 1040, lines 9a and 9b, or Form 1040NR, lines 10a and 10b. Free turbo tax 2013 Instead, include the amount from Form 8814, line 9, on Form 1040, lines 9a and 9b, or Form 1040NR, lines 10a and 10b. Free turbo tax 2013 (The amount on Form 8814, line 9, may be less than the amount on Form 8814, line 2b, because lines 7 through 12 of the form divide the $2,000 base amount on Form 8814, line 5, between the child's qualified dividends, capital gain distributions, and other interest and dividend income, reducing each of those amounts. Free turbo tax 2013 ) Capital gain distributions. Free turbo tax 2013   Enter on Form 8814, line 3, any capital gain distributions your child received. Free turbo tax 2013 The amount of these distributions that is added to your income must be reported on Schedule D (Form 1040), line 13, or, if you are not required to file Schedule D, on Form 1040, line 13, or Form 1040NR, line 14. Free turbo tax 2013 You do not include it on Form 8814, line 12, or on line 21 of Form 1040 or Form 1040NR. Free turbo tax 2013   Include the amount from Form 8814, line 10, on Schedule D, line 13; Form 1040, line 13; or Form 1040NR, line 14, whichever applies. Free turbo tax 2013 (The amount on Form 8814, line 10, may be less than the amount on Form 8814, line 3, because lines 7 through 12 of the form divide the $2,000 base amount on Form 8814, line 5, between the child's qualified dividends, capital gain distributions, and other interest and dividend income, reducing each of those amounts. Free turbo tax 2013 ) Collectibles (28% rate) gain. Free turbo tax 2013    If any of the child's capital gain distributions are reported on Form 1099-DIV as collectibles (28% rate) gain, you must determine how much to also include on line 4 of the 28% Rate Gain Worksheet, in the instructions for Schedule D, line 18. Free turbo tax 2013 Multiply the child's capital gain distribution included on Schedule D, line 13, by a fraction. Free turbo tax 2013 The numerator is the part of the child's total capital gain distribution that is collectibles (28% rate) gain. Free turbo tax 2013 The denominator is the child's total capital gain distribution. Free turbo tax 2013 Enter the result on line 4 of the 28% Rate Gain Worksheet. Free turbo tax 2013 Unrecaptured section 1250 gain. Free turbo tax 2013   If any of the child's capital gain distributions are reported on Form 1099-DIV as unrecaptured section 1250 gain, you must determine how much to include on line 11 of the Unrecaptured Section 1250 Gain Worksheet in the instructions for Schedule D, line 19. Free turbo tax 2013 Multiply the child's capital gain distribution included on Schedule D, line 13, by a fraction. Free turbo tax 2013 The numerator is the part of the child's total capital gain distribution that is unrecaptured section 1250 gain. Free turbo tax 2013 The denominator is the child's total capital gain distribution. Free turbo tax 2013 Enter the result on the Unrecaptured Section 1250 Gain Worksheet, line 11. Free turbo tax 2013 Section 1202 gain. Free turbo tax 2013   If any of the child's capital gain distributions are reported as section 1202 gain (gain on qualified small business stock) on Form 1099-DIV, part or all of that gain may be eligible for the section 1202 exclusion. Free turbo tax 2013 (For information about the exclusion, see chapter 4 of Publication 550. Free turbo tax 2013 ) To figure that part, multiply the child's capital gain distribution included on Schedule D, line 13, by a fraction. Free turbo tax 2013 The numerator is the part of the child's total capital gain distribution that is section 1202 gain. Free turbo tax 2013 The denominator is the child's total capital gain distribution. Free turbo tax 2013 Your section 1202 exclusion is generally 50% of the result, but may be subject to a limit. Free turbo tax 2013 In some cases, the exclusion is more than 50%. Free turbo tax 2013 See the instructions for Schedule D for details and information on how to report the exclusion amount. Free turbo tax 2013 Example. Free turbo tax 2013 Fred is 6 years old. Free turbo tax 2013 In 2013, he received dividend income of $2,100, which included $1,575 of ordinary dividends and a $525 capital gain distribution from a mutual fund. Free turbo tax 2013 (None of the distributions were reported on Form 1099-DIV as unrecaptured section 1250 gain, section 1202 gain, or collectibles (28% rate) gain. Free turbo tax 2013 ) All of the ordinary dividends are qualified dividends. Free turbo tax 2013 He has no other income and is not subject to backup withholding. Free turbo tax 2013 No estimated tax payments were made under his name and social security number. Free turbo tax 2013 Fred's parents elect to include Fred's income on their tax return instead of filing a return for him. Free turbo tax 2013 They figure the amount to report on Form 1040, lines 9a and 9b, the amount to report on their Schedule D, line 13, and the amount to report on Form 1040, line 21, as follows. Free turbo tax 2013 They leave lines 1a and 1b of Form 8814 blank because Fred does not have any interest income. Free turbo tax 2013 They enter his ordinary dividends of $1,575 on lines 2a and 2b because all of Fred's ordinary dividends are qualified dividends. Free turbo tax 2013 They enter the amount of Fred's capital gain distributions, $525, on line 3. Free turbo tax 2013 Next, they add the amounts on lines 1a, 2a, and 3 and enter the result, $2,100, on line 4. Free turbo tax 2013 They subtract the base amount on line 5, $2,000, from the amount on line 4, $2,100, and enter the result, $100, on line 6. Free turbo tax 2013 This is the total amount from Form 8814 to be reported on their return. Free turbo tax 2013 Next, they figure how much of this amount is qualified dividends and how much is capital gain distributions. Free turbo tax 2013 They divide the amount on line 2b, $1,575, by the amount on line 4, $2,100. Free turbo tax 2013 They enter the result, . Free turbo tax 2013 75, on line 7. Free turbo tax 2013 They divide the amount on line 3, $525, by the amount on line 4, $2,100. Free turbo tax 2013 They enter the result, . Free turbo tax 2013 25, on line 8. Free turbo tax 2013 They multiply the amount on line 6, $100, by the decimal on line 7, . Free turbo tax 2013 75, and enter the result, $75, on line 9. Free turbo tax 2013 They multiply the amount on line 6, $100, by the decimal on line 8, . Free turbo tax 2013 25, and enter the result, $25, on line 10. Free turbo tax 2013 They include the amount from line 9, $75, on lines 9a and 9b of their Form 1040 and enter “Form 8814 – $75” on the dotted lines next to lines 9a and 9b. Free turbo tax 2013 They include the amount from line 10, $25, on line 13 of their Schedule D (Form 1040) and enter “Form 8814 – $25” on the dotted line next to Schedule D, line 13. Free turbo tax 2013 They enter $100 ($75 + $25) on line 11 and -0- ($100 – $100) on line 12. Free turbo tax 2013 Because the amount on line 12 is -0-, they do not include any amount from Form 8814 on their Form 1040, line 21. Free turbo tax 2013 Figuring Additional Tax Use Form 8814, Part II, to figure the tax on the $2,000 of your child's interest and dividends that you do not include in your income. Free turbo tax 2013 This tax is added to the tax figured on your income. Free turbo tax 2013 This additional tax is the smaller of: 10% x (your child's gross income − $1,000), or $100. Free turbo tax 2013 Include the amount from line 15 of all your Forms 8814 in the total on Form 1040, line 44, or Form 1040NR, line 42. Free turbo tax 2013 Check box a on Form 1040, line 44, or Form 1040NR, line 42. Free turbo tax 2013 Tax for Certain Children Who Have Unearned Income If a child's interest, dividends, and other unearned income total more than $2,000, part of that income may be taxed at the parent's tax rate instead of the child's tax rate. Free turbo tax 2013 If the parent does not or cannot choose to include the child's income on the parent's return, use Form 8615 to figure the child's tax. Free turbo tax 2013 Attach the completed form to the child's Form 1040, Form 1040A, or Form 1040NR. Free turbo tax 2013 When Form 8615 must be filed. Free turbo tax 2013   Form 8615 must be filed for a child if all of the following statements are true. Free turbo tax 2013 The child's unearned income was more than $2,000. Free turbo tax 2013 The child is required to file a return for 2013. Free turbo tax 2013 The child either: Was under age 18 at the end of the year, Was age 18 at the end of the year and did not have earned income that was more than half of his or her support, or Was over age 18 and under age 24 at the end of the year, was a full-time student, and did not have earned income that was more than half of his or her support. Free turbo tax 2013 At least one of the child's parents was alive at the end of 2013. Free turbo tax 2013 The child does not file a joint return for 2013. Free turbo tax 2013 These conditions are also shown in Figure 2. Free turbo tax 2013 Certain January 1 birthdays. Free turbo tax 2013   Use the following chart to determine whether certain children with January 1 birthdays meet condition 3 under When Form 8615 must be filed. Free turbo tax 2013 IF a child was born on. Free turbo tax 2013 . Free turbo tax 2013 . Free turbo tax 2013 THEN, at the end of 2013, the child is considered to be. Free turbo tax 2013 . Free turbo tax 2013 . Free turbo tax 2013 January 1, 1996 18* January 1, 1995 19** January 1, 1990 24*** *This child is not under age 18. Free turbo tax 2013 The child meets condition 3 only if the child did not have earned income that was more than half of the child's support. Free turbo tax 2013  **This child meets condition 3 only if the child was a full-time student who did not have earned income that was more than half of the child's support. Free turbo tax 2013  ***Do not use Form 8615 for this child. Free turbo tax 2013 Figure 2. Free turbo tax 2013 Do You Have To Use Form 8615 To Figure Your Child's Tax? Please click here for the text description of the image. Free turbo tax 2013 Figure 2. Free turbo tax 2013 Do You Have To Use Form 8615 To Figure Your Child's Tax? Providing Parental Information (Form 8615, Lines A–C) On Form 8615, lines A and B, enter the parent's name and social security number. Free turbo tax 2013 (If the parents filed a joint return, enter the name and social security number listed first on the joint return. Free turbo tax 2013 ) On line C, check the box for the parent's filing status. Free turbo tax 2013 See Which Parent's Return To Use, earlier, for information on which parent's return information must be used on Form 8615. Free turbo tax 2013 Parent with different tax year. Free turbo tax 2013   If the parent and the child do not have the same tax year, complete Form 8615 using the information on the parent's return for the tax year that ends in the child's tax year. Free turbo tax 2013 Example. Free turbo tax 2013 Kimberly must use her mother's tax and taxable income to complete her Form 8615 for calendar year 2013 (January 1 – December 31). Free turbo tax 2013 Kimberly's mother files her tax return on a fiscal year basis (July 1 – June 30). Free turbo tax 2013 Kimberly must use the information on her mother's return for the tax year ending June 30, 2013, to complete her 2013 Form 8615. Free turbo tax 2013 Parent's return information not known timely. Free turbo tax 2013   If the information needed from the parent's return is not known by the time the child's return is due (usually April 15), you can file the return using estimates. Free turbo tax 2013   You can use any reasonable estimate. Free turbo tax 2013 This includes using information from last year's return. Free turbo tax 2013 If you use an estimated amount on Form 8615, enter “Estimated” on the line next to the amount. Free turbo tax 2013   When you get the correct information, file an amended return on Form 1040X, Amended U. Free turbo tax 2013 S. Free turbo tax 2013 Individual Income Tax Return. Free turbo tax 2013 Extension of time to file. Free turbo tax 2013   Instead of using estimates, you can get an automatic 6-month extension of time to file if, by the date your return is due, you file Form 4868, Application for Automatic Extension of Time To File U. Free turbo tax 2013 S. Free turbo tax 2013 Individual Income Tax Return. Free turbo tax 2013 See the instructions for Form 4868 for details. Free turbo tax 2013    An extension of time to file is not an extension of time to pay. Free turbo tax 2013 You must make an accurate estimate of the tax for 2013. Free turbo tax 2013 If you do not pay the full amount due by the regular due date, the child will owe interest and may also be charged penalties. Free turbo tax 2013 See Form 4868 and its instructions. Free turbo tax 2013 Parent's return information not available. Free turbo tax 2013   If a child cannot get the required information about his or her parent's tax return, the child (or the child's legal representative) can request the necessary information from the Internal Revenue Service (IRS). Free turbo tax 2013 How to request. Free turbo tax 2013   After the end of the tax year, send a signed, written request for the information to the Internal Revenue Service Center where the parent's return will be filed. Free turbo tax 2013 (The IRS cannot process a request received before the end of the tax year. Free turbo tax 2013 )    You should also consider getting an extension of time to file the child's return, because there may be a delay in getting the requested information. Free turbo tax 2013   The request must contain all of the following. Free turbo tax 2013 A statement that you are making the request to comply with section 1(g) of the Internal Revenue Code and that you have tried to get the information from the parent. Free turbo tax 2013 Proof of the child's age (for example, a copy of the child's birth certificate). Free turbo tax 2013 Evidence the child has more than $2,000 of unearned income (for example, a copy of the child's prior year tax return or copies of Forms 1099 for the current year). Free turbo tax 2013 The name, address, social security number (if known), and filing status (if known) of the parent whose information is to be shown on Form 8615. Free turbo tax 2013    A child's legal representative making the request should include a copy of his or her Power of Attorney, such as Form 2848, or proof of legal guardianship. Free turbo tax 2013 Step 1. Free turbo tax 2013 Figuring the Child's Net Unearned Income (Form 8615, Part I) The first step in figuring a child's tax using Form 8615 is to figure the child's net unearned income. Free turbo tax 2013 To do that, use Form 8615, Part I. Free turbo tax 2013 Line 1 (Unearned Income) If the child had no earned income, enter on this line the adjusted gross income shown on the child's return. Free turbo tax 2013 Adjusted gross income is shown on Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37. Free turbo tax 2013 Form 1040EZ and Form 1040NR-EZ cannot be used if Form 8615 must be filed. Free turbo tax 2013 If the child had earned income, figure the amount to enter on Form 8615, line 1, by using the worksheet in the instructions for the form. Free turbo tax 2013 However, use the following worksheet if: the child has excluded any foreign earned income, deducted a loss from self-employment, or has a net operating loss from another year. Free turbo tax 2013 Alternate Worksheet for Form 8615, Line 1 A. Free turbo tax 2013 Enter the amount from the child's Form 1040, line 22, or Form 1040NR, line 23   B. Free turbo tax 2013 Enter the total of any net loss  from self-employment, any net operating loss deduction, any foreign earned income exclusion, and any foreign housing exclusion from the child's Form 1040 or Form 1040NR. Free turbo tax 2013 Enter this total as a positive number (greater than zero)   C. Free turbo tax 2013 Add line A and line B and  enter the total   D. Free turbo tax 2013 Enter the child's earned income plus any amount from the child's Form 1040, line 30, or the child's Form 1040NR, line 30     Generally, the child's earned income is the total of the amounts reported on Form 1040, lines 7, 12, and 18 (if line 12 or 18 is a loss, use zero) or Form 1040NR, lines 8, 13, and 19 (if line 13 or 19 is a loss, use zero)   E. Free turbo tax 2013 Subtract line D from line C. Free turbo tax 2013 Enter the result here and on Form 8615, line 1   Unearned income defined. Free turbo tax 2013   Unearned income is generally all income other than salaries, wages, and other amounts received as pay for work actually performed. Free turbo tax 2013 It includes taxable interest, dividends, capital gains (including capital gain distributions), the taxable part of social security and pension payments, certain distributions from trusts, and unemployment compensation. Free turbo tax 2013 Unearned income includes amounts produced by assets the child obtained with earned income (such as interest on a savings account into which the child deposited wages). Free turbo tax 2013 Nontaxable income. Free turbo tax 2013   For this purpose, unearned income includes only amounts the child must include in gross income. Free turbo tax 2013 Nontaxable unearned income, such as tax-exempt interest and the nontaxable part of social security and pension payments, is not included. Free turbo tax 2013 Capital loss. Free turbo tax 2013   A child's capital losses are taken into account in figuring the child's unearned income. Free turbo tax 2013 Capital losses are first applied against capital gains. Free turbo tax 2013 If the capital losses are more than the capital gains, the difference (up to $3,000) is subtracted from the child's interest, dividends, and other unearned income. Free turbo tax 2013 Any difference over $3,000 is carried to the next year. Free turbo tax 2013 Income from property received as a gift. Free turbo tax 2013   A child's unearned income includes all income produced by property belonging to the child. Free turbo tax 2013 This is true even if the property was transferred to the child, regardless of when the property was transferred or purchased or who transferred it. Free turbo tax 2013   A child's unearned income includes income produced by property given as a gift to the child. Free turbo tax 2013 This includes gifts to the child from grandparents or any other person and gifts made under the Uniform Gift to Minors Act. Free turbo tax 2013 Example. Free turbo tax 2013 Amanda Black, age 13, received the following income. Free turbo tax 2013 Dividends—$800 Wages—$2,100 Taxable interest—$1,200 Tax-exempt interest—$100 Capital gains—$300 Capital losses—($200) The dividends were qualified dividends on stock given to her by her grandparents. Free turbo tax 2013 Amanda's unearned income is $2,100. Free turbo tax 2013 This is the total of the dividends ($800), taxable interest ($1,200), and capital gains reduced by capital losses ($300 − $200 = $100). Free turbo tax 2013 Her wages are earned (not unearned) income because they are received for work actually performed. Free turbo tax 2013 Her tax-exempt interest is not included because it is nontaxable. Free turbo tax 2013 Trust income. Free turbo tax 2013   If a child is the beneficiary of a trust, distributions of taxable interest, dividends, capital gains, and other unearned income from the trust are unearned income to the child. Free turbo tax 2013   However, taxable distributions from a qualified disability trust are considered earned income for the purposes of completing Form 8615. Free turbo tax 2013 See the Form 8615 instructions for details. Free turbo tax 2013 Adjustment to income. Free turbo tax 2013   In figuring the amount to enter on line 1, the child's unearned income is reduced by any penalty on the early withdrawal of savings. Free turbo tax 2013 Line 2 (Deductions) If the child does not itemize deductions on Schedule A (Form 1040 or Form 1040NR), enter $2,000 on line 2. Free turbo tax 2013 If the child itemizes deductions, enter on line 2 the larger of: $1,000 plus the portion of the child's itemized deductions on Schedule A (Form 1040), line 29 (or Schedule A (Form 1040NR), line 15), that are directly connected with the production of the unearned income entered on line 1, or $2,000. Free turbo tax 2013 Directly connected. Free turbo tax 2013   Itemized deductions are directly connected with the production of unearned income if they are for expenses paid to produce or collect taxable income or to manage, conserve, or maintain property held for producing income. Free turbo tax 2013 These expenses include custodian fees and service charges, service fees to collect taxable interest and dividends, and certain investment counsel fees. Free turbo tax 2013    These expenses are added to certain other miscellaneous itemized deductions on Schedule A (Form 1040). Free turbo tax 2013 Only the amount greater than 2% of the child's adjusted gross income can be deducted. Free turbo tax 2013 See Publication 529, Miscellaneous Deductions, for more information. Free turbo tax 2013 Example 1. Free turbo tax 2013 Roger, age 12, has unearned income of $8,000, no other income, no adjustments to income, and itemized deductions of $300 (net of the 2%-of-adjusted-gross-income limit) that are directly connected with his unearned income. Free turbo tax 2013 His adjusted gross income is $8,000, which is entered on Form 1040, line 38, and on Form 8615, line 1. Free turbo tax 2013 Roger enters $2,000 on line 2 because that is more than the total of $1,000 plus his directly-connected itemized deductions of $300. Free turbo tax 2013 Example 2. Free turbo tax 2013 Eleanor, age 8, has unearned income of $16,000 and an early withdrawal penalty of $100. Free turbo tax 2013 She has no other income. Free turbo tax 2013 She has itemized deductions of $1,050 (net of the 2%-of-adjusted-gross-income limit) that are directly connected with the production of her unearned income. Free turbo tax 2013 Her adjusted gross income, entered on line 1, is $15,900 ($16,000 − $100). Free turbo tax 2013 The amount on line 2 is $2,050. Free turbo tax 2013 This is the larger of: $1,000 plus the $1,050 of directly connected itemized deductions, or $2,000. Free turbo tax 2013 Line 3 Subtract line 2 from line 1 and enter the result on this line. Free turbo tax 2013 If zero or less, do not complete the rest of the form. Free turbo tax 2013 However, you must still attach Form 8615 to the child's tax return. Free turbo tax 2013 Figure the tax on the child's taxable income in the normal manner. Free turbo tax 2013 Line 4 (Child's Taxable Income) Enter on line 4 the child's taxable income from Form 1040, line 43; Form 1040A, line 27; or Form 1040NR, line 41. Free turbo tax 2013 Child files Form 2555 or 2555-EZ. Free turbo tax 2013   If the child files Form 2555 or 2555-EZ to claim the foreign earned income exclusion, housing exclusion, or housing deduction, the Foreign Earned Income Tax Worksheet (in the Form 1040 instructions) is used to figure the child's tax. Free turbo tax 2013 Enter the amount from line 3 of the Foreign Earned Income Tax Worksheet as the child's taxable income on Form 8615, line 4. Free turbo tax 2013 Line 5 (Net Unearned Income) A child's net unearned income cannot be more than his or her taxable income. Free turbo tax 2013 Enter on Form 8615, line 5, the smaller of line 3 or line 4. Free turbo tax 2013 This is the child's net unearned income. Free turbo tax 2013 If zero or less, do not complete the rest of the form. Free turbo tax 2013 However, you must still attach Form 8615 to the child's tax return. Free turbo tax 2013 Figure the tax on the child's taxable income in the normal manner. Free turbo tax 2013 Step 2. Free turbo tax 2013 Figuring a Tentative Tax at the Parent's Tax Rate (Form 8615, Part II) The next step in completing Form 8615 is to figure a tentative tax on the child's net unearned income at the parent's tax rate. Free turbo tax 2013 The tentative tax at the parent's tax rate is the difference between the tax on the parent's taxable income figured with the child's net unearned income (plus the net unearned income of any other child whose Form 8615 includes the tax return information of that parent) and the tax figured without it. Free turbo tax 2013 When figuring the tentative tax at the parent's tax rate on Form 8615, do not refigure any of the exclusions, deductions, or credits on the parent's return because of the child's net unearned income. Free turbo tax 2013 For example, do not refigure the medical expense deduction. Free turbo tax 2013 Figure the tentative tax on Form 8615, lines 6 through 13. Free turbo tax 2013 Line 6 (Parent's Taxable Income) Enter on line 6 the amount from the parent's Form 1040, line 43; Form 1040A, line 27; Form 1040EZ, line 6; Form 1040NR, line 41; or Form 1040NR-EZ, line 14. Free turbo tax 2013 If the parent's taxable income is zero or less, enter zero on line 6. Free turbo tax 2013 Parent files Form 2555 or 2555-EZ. Free turbo tax 2013   If the parent files Form 2555 or 2555-EZ to claim the foreign earned income exclusion, housing exclusion, or housing deduction, the Foreign Earned Income Tax Worksheet in the Form 1040 instructions is used to figure the parent's tax. Free turbo tax 2013 Enter the amount from line 3 of the Foreign Earned Income Tax Worksheet as the parent's taxable income, on line 6 of Form 8615. Free turbo tax 2013 Line 7 (Net Unearned Income of Other Children) If the tax return information of the parent is also used on any other child's Form 8615, enter on line 7 the total of the amounts from line 5 of all the other children's Forms 8615. Free turbo tax 2013 Do not include the amount from line 5 of the Form 8615 being completed. Free turbo tax 2013 (The term “other child” means any other child whose Form 8615 uses the tax information of the parent identified on Lines A and B of Form 8615. Free turbo tax 2013 ) Example. Free turbo tax 2013 Paul and Jane Persimmon have three children, Sharon, Jerry, and Mike, who must attach Form 8615 to their tax returns. Free turbo tax 2013 The children's net unearned income amounts on line 5 of their Forms 8615 are: Sharon—$800 Jerry—$600 Mike—$1,000 Line 7 of Sharon's Form 8615 will show $1,600, the total of the amounts on line 5 of Jerry's and Mike's Forms 8615. Free turbo tax 2013 Line 7 of Jerry's Form 8615 will show $1,800 ($800 + $1,000). Free turbo tax 2013 Line 7 of Mike's Form 8615 will show $1,400 ($800 + $600). Free turbo tax 2013 Other children's information not available. Free turbo tax 2013   If the net unearned income of the other children is not available when the return is due, either file the return using estimates or get an extension of time to file. Free turbo tax 2013 Estimates and extensions are discussed earlier under Providing Parental Information (Form 8615, Lines A–C) . Free turbo tax 2013 Line 8 (Parent's Taxable Income Plus Children's Net Unearned Income) Enter on this line the total of lines 5, 6, and 7. Free turbo tax 2013 You must determine the amount of net capital gain and qualified dividends included on this line before completing Form 8615, line 9. Free turbo tax 2013 Net capital gain. Free turbo tax 2013   Net capital gain is the smaller of the gain, if any, on Schedule D (Form 1040), line 15, or the gain, if any, on Schedule D, line 16. Free turbo tax 2013 If Schedule D is not required, it is the amount on Form 1040, line 13; Form 1040A, line 10; or Form 1040NR, line 14. Free turbo tax 2013 Qualified dividends. Free turbo tax 2013   Qualified dividends are those dividends reported on line 9b of Form 1040 or Form 1040A, or line 10b of Form 1040NR. Free turbo tax 2013 Net capital gain and qualified dividends on line 8. Free turbo tax 2013   If neither the child, nor the parent, nor any other child has net capital gain, the net capital gain on line 8 is zero. Free turbo tax 2013   If neither the child, nor the parent, nor any other child has qualified dividends, the amount of qualified dividends on line 8 is zero. Free turbo tax 2013   If the child, parent, or any other child has net capital gain, figure the amount of net capital gain included on line 8 by adding together the net capital gain amounts included on lines 5, 6, and 7 of Form 8615. Free turbo tax 2013   If the child, parent, or any other child has qualified dividends, figure the amount of qualified dividends included on line 8 by adding together the qualified dividend amounts included on lines 5, 6, and 7. Free turbo tax 2013   Use the instructions for Form 8615, line 8, including the appropriate Line 5 Worksheet, to find these amounts. Free turbo tax 2013 See the instructions for Form 8615 for more details. Free turbo tax 2013 Note. Free turbo tax 2013 The amount of any net capital gain or qualified dividends is not separately reported on line 8. Free turbo tax 2013 It is  needed, however, when figuring the tax on line 9. Free turbo tax 2013 Line 9 (Tax on Parent's Taxable Income Plus Children's Net Unearned Income) Figure the tax on the amount on line 8 using the Tax Table, the Tax Computation Worksheet, the Qualified Dividends and Capital Gain Tax Worksheet (in the Form 1040, 1040A, or 1040NR instructions), the Schedule D Tax Worksheet (in the Schedule D instructions), or Schedule J (Form 1040), as follows. Free turbo tax 2013 If line 8 does not include any net capital gain or qualified dividends, use the Tax Table or Tax Computation Worksheet to figure this tax. Free turbo tax 2013 But if Schedule J, Income Averaging for Farmers and Fishermen, is used to figure the tax on the parent's return, use it to figure this tax. Free turbo tax 2013 If line 8 includes any net capital gain or qualified dividends, use the Qualified Dividends and Capital Gain Tax Worksheet to figure this tax. Free turbo tax 2013 For details, see the instructions for Form 8615, line 9. Free turbo tax 2013 However, if the child, parent, or any other child has 28% rate gain or unrecaptured section 1250 gain, use the Schedule D Tax Worksheet. Free turbo tax 2013 But if Schedule J is used to figure the tax on the parent's return, use it to figure this tax. Free turbo tax 2013 Child files Form 2555 or 2555-EZ. Free turbo tax 2013   If line 8 includes any net capital gain or qualified dividends and the child, or any other child filing Form 8615, also files Form 2555 or 2555-EZ, use Using the Schedule D Tax Worksheet for line 9 tax, next, to figure the line 9 tax. Free turbo tax 2013 Using the Schedule D Tax Worksheet for line 9 tax. Free turbo tax 2013    Use the Schedule D Tax Worksheet (in the Schedule D instructions) to figure the line 9 tax on Form 8615 if the child, parent, or any other child has unrecaptured section 1250 gain or 28% rate gain. Free turbo tax 2013 If you must use the Schedule D Tax Worksheet, first complete any Schedule D and any actual Schedule D Tax Worksheet required for the child, parent, or any other child. Free turbo tax 2013 Then figure the line 9 tax using another Schedule D Tax Worksheet. Free turbo tax 2013 (Do not attach this Schedule D Tax Worksheet to the child's return. Free turbo tax 2013 )   Complete this Schedule D Tax Worksheet as follows. Free turbo tax 2013 On line 1, enter the amount from Form 8615, line 8. Free turbo tax 2013 On line 2, enter the qualified dividends included on Form 8615, line 8. Free turbo tax 2013 (See the earlier discussion for line 8. Free turbo tax 2013 ) On line 3, enter the total of the amounts, if any, on line 4g of all Forms 4952 filed by the child, parent, or any other child. Free turbo tax 2013 On line 4, enter the total of the amounts, if any, on line 4e of all Forms 4952 filed by the child, parent, or any other child. Free turbo tax 2013 If applicable, include instead the smaller amount entered on the dotted line next to line 4e. Free turbo tax 2013 On lines 5 and 6, follow the worksheet instructions. Free turbo tax 2013 On line 7, enter the net capital gain included on Form 8615, line 8. Free turbo tax 2013 (See the earlier discussion for line 8. Free turbo tax 2013 ) On lines 8 through 10, follow the worksheet instructions. Free turbo tax 2013 On line 11, enter zero if neither the child, nor the parent, nor any other child has unrecaptured section 1250 gain (Schedule D, line 19) or 28% rate gain (Schedule D, line 18). Free turbo tax 2013 Otherwise, enter the amount of unrecaptured section 1250 gain and 28% rate gain included in the net capital gain on line 8 of Form 8615. Free turbo tax 2013 Figure these amounts as explained later under Figuring unrecaptured section 1250 gain (line 11) and Figuring 28% rate gain (line 11). Free turbo tax 2013 If the Foreign Earned Income Tax Worksheet was used to figure the parent's tax or the tax of any child, go to step 10 below. Free turbo tax 2013 Otherwise, skip steps 10, 11, and 12 below, and go to step 13. Free turbo tax 2013 Determine whether there is a line 8 capital gain excess as follows. Free turbo tax 2013 Add the amounts on line 2 of all Foreign Earned Income Tax Worksheets completed by the parent or any child for whom Form 8615 is filed. Free turbo tax 2013 (But for each child do not add more than the excess, if any, of the amount on line 5 of the child's Form 8615 over the child's taxable income on Form 1040, line 43; Form 1040A, line 27; or Form 1040NR, line 41. Free turbo tax 2013 ) Subtract (a) from the amount on line 1 of this Schedule D Tax Worksheet. Free turbo tax 2013 Subtract (b) from the amount on line 10 of this Schedule D Tax Worksheet. Free turbo tax 2013 If the result is more than zero, that amount is the line 8 capital gain excess. Free turbo tax 2013 If the result is zero or less, there is no line 8 capital gain excess. Free turbo tax 2013 If there is no line 8 capital gain excess, skip step 12 below and go to step 13. Free turbo tax 2013 If there is a line 8 capital gain excess, complete a second Schedule D Tax Worksheet as instructed above and in step 13, but in its entirety and with the following additional modifications. Free turbo tax 2013 (These modifications are to be made only for purposes of filling out this additional Schedule D Tax Worksheet. Free turbo tax 2013 ) Reduce the amount you would otherwise enter on line 9 (but not below zero) by the line 8 capital gain excess. Free turbo tax 2013 Reduce the amount you would otherwise enter on line 6 (but not below zero) by any of the line 8 capital gain excess not used in (a) above. Free turbo tax 2013 If the child, parent, or any other child has 28% rate gain, reduce the amount you would otherwise enter on line 8 of Worksheet 1 for Line 11 of the Schedule D Tax Worksheet – 28% Rate Gain (Line 9 Tax), shown later, (but not below zero) by the line 8 capital gain excess, and refigure the amount on line 11 of this Schedule D Tax Worksheet. Free turbo tax 2013 If the child, parent, or any other child has unrecaptured section 1250 gain, reduce the amount you would otherwise enter on line 8 of Worksheet 2 for Line 11 of the Schedule D Tax Worksheet – Unrecaptured Section 1250 Gain (Line 9 Tax) (but not below zero) by the line 8 capital gain excess not used in 12(c), and refigure the amount on line 11 of this Schedule D Tax Worksheet. Free turbo tax 2013 Complete lines 12 through 45 following the worksheet instructions. Free turbo tax 2013 Use the parent's filing status to complete lines 15, 42, and 44. Free turbo tax 2013 Enter the amount from line 45 of this Schedule D Tax Worksheet on Form 8615, line 9, and check the box on that line
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