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Taxact Returning User

Taxact returning user Publication 584 - Additional Material Table of Contents This image is too large to be displayed in the current screen. Taxact returning user Please click the link to view the image. Taxact returning user Entrance Hall This image is too large to be displayed in the current screen. Taxact returning user Please click the link to view the image. Taxact returning user Living Room This image is too large to be displayed in the current screen. Taxact returning user Please click the link to view the image. Taxact returning user Dining Room This image is too large to be displayed in the current screen. Taxact returning user Please click the link to view the image. Taxact returning user Kitchen This image is too large to be displayed in the current screen. Taxact returning user Please click the link to view the image. Taxact returning user Den This image is too large to be displayed in the current screen. Taxact returning user Please click the link to view the image. Taxact returning user Bedrooms This image is too large to be displayed in the current screen. Taxact returning user Please click the link to view the image. Taxact returning user Bathrooms This image is too large to be displayed in the current screen. Taxact returning user Please click the link to view the image. Taxact returning user Recreation Room This image is too large to be displayed in the current screen. Taxact returning user Please click the link to view the image. Taxact returning user Laundry and Basement This image is too large to be displayed in the current screen. Taxact returning user Please click the link to view the image. Taxact returning user Garage This image is too large to be displayed in the current screen. Taxact returning user Please click the link to view the image. Taxact returning user Sporting Equipment This image is too large to be displayed in the current screen. Taxact returning user Please click the link to view the image. Taxact returning user Men's Clothing This image is too large to be displayed in the current screen. Taxact returning user Please click the link to view the image. Taxact returning user Women's Clothing This image is too large to be displayed in the current screen. Taxact returning user Please click the link to view the image. Taxact returning user Children's Clothing This image is too large to be displayed in the current screen. Taxact returning user Please click the link to view the image. Taxact returning user Jewelry This image is too large to be displayed in the current screen. Taxact returning user Please click the link to view the image. Taxact returning user Electrical Appliances This image is too large to be displayed in the current screen. Taxact returning user Please click the link to view the image. Taxact returning user Linens This image is too large to be displayed in the current screen. Taxact returning user Please click the link to view the image. Taxact returning user Miscellaneous This image is too large to be displayed in the current screen. Taxact returning user Please click the link to view the image. Taxact returning user Motor Vehicles Schedule 20. Taxact returning user Home (Excluding Contents) Note. Taxact returning user If you used the entire property as your home, fill out only column (a). Taxact returning user If you used part of the property as your home and part of it for business or to produce rental income, you must allocate the entries on lines 2-9 between the personal part (column (a)) and the business/rental part (column (b)). Taxact returning user 1. Taxact returning user Description of property (Show location and date acquired. Taxact returning user )     (a)  Personal Part (b)  Business/Rental Part 2. Taxact returning user Cost or other (adjusted) basis of property (from Worksheet A)     3. Taxact returning user Insurance or other reimbursement Note. Taxact returning user If line 2 is more than line 3, skip line 4. Taxact returning user If line 3 is more than line 2, you exclude gain, and the gain is more than you can exclude, see the instructions for line 3 in the Instructions for Form 4684 for the amount to enter. Taxact returning user     4. Taxact returning user Gain from casualty. Taxact returning user If line 3 is more than line 2, enter the difference here and skip lines 5 through 9. Taxact returning user But see Next below line 9. Taxact returning user     5. Taxact returning user Fair market value before casualty     6. Taxact returning user Fair market value after casualty     7. Taxact returning user Decrease in fair market value. Taxact returning user Subtract line 6 from line 5. Taxact returning user     8. Taxact returning user Enter the smaller of line 2 or line 7 Note for business/rental part. Taxact returning user If the property was totally destroyed by casualty, enter on line 8, column (b) the amount from line 2, column (b). Taxact returning user     9. Taxact returning user Subtract line 3 from line 8. Taxact returning user If zero or less, enter -0-. Taxact returning user     Next: Transfer the entries from line 1 and lines 2-9, column (a), above to the corresponding lines on Form 4684, Section A. Taxact returning user Transfer the entries from line 1 and lines 2-9, column (b), to the corresponding lines on Form 4684, Section B. Taxact returning user Worksheet A. Taxact returning user Cost or Other (Adjusted) Basis Caution. Taxact returning user See the Worksheet A Instructions before you use this worksheet. Taxact returning user         (a) Personal Part (b) Business/Rental Part 1. Taxact returning user   Enter the purchase price of the home damaged or destroyed. Taxact returning user (If you filed Form 2119 when you originally acquired that home to postpone gain on the sale of a previous home before May 7, 1997, enter the adjusted basis of the new home from that Form 2119. Taxact returning user ) 1. Taxact returning user     2. Taxact returning user   Seller paid points for home bought after 1990. Taxact returning user Do not include any seller-paid points you already subtracted to arrive at the amount entered on line 1 2. Taxact returning user     3. Taxact returning user   Subtract line 2 from line 1 3. Taxact returning user     4. Taxact returning user   Settlement fees or closing costs. Taxact returning user (See Settlement costs in Publication 551. Taxact returning user ) If line 1 includes the adjusted basis of the new home from Form 2119, skip lines 4a-4g and 5; go to line 6. Taxact returning user         a. Taxact returning user Abstract and recording fees 4a. Taxact returning user       b. Taxact returning user Legal fees (including fees for title search and preparing documents) 4b. Taxact returning user       c. Taxact returning user Survey fees 4c. Taxact returning user       d. Taxact returning user Title insurance 4d. Taxact returning user       e. Taxact returning user Transfer or stamp taxes 4e. Taxact returning user       f. Taxact returning user Amounts that the seller owed that you agreed to pay (back taxes or interest, recording or mortgage fees, and sales commissions) 4f. Taxact returning user       g. Taxact returning user Other 4g. Taxact returning user     5. Taxact returning user   Add lines 4a through 4g 5. Taxact returning user     6. Taxact returning user   Cost of additions and improvements. Taxact returning user (See Increases to Basis in Publication 551. Taxact returning user ) Do not include any additions and improvements included on line 1 6. Taxact returning user     7. Taxact returning user   Special tax assessments paid for local improvements, such as streets and sidewalks 7. Taxact returning user     8. Taxact returning user   Other increases to basis 8. Taxact returning user     9. Taxact returning user   Add lines 3, 5, 6, 7, and 8 9. Taxact returning user     10. Taxact returning user   Depreciation allowed or allowable, related to the business use or rental of the home 10. Taxact returning user 0   11. Taxact returning user   Other decreases to basis (See Decreases to Basis in Publication 551. Taxact returning user ) 11. Taxact returning user     12. Taxact returning user   Add lines 10 and 11 12. Taxact returning user     13. Taxact returning user   Cost or other (adjusted) basis of home damaged or destroyed. Taxact returning user Subtract line 12 from line 9. Taxact returning user Enter here and on Schedule 20, line 2 13. Taxact returning user     Worksheet A Instructions. Taxact returning user If you use Worksheet A to figure the cost or other (adjusted) basis of your home, follow these instructions. Taxact returning user DO NOT use this worksheet to determine your basis if you acquired an interest in your home from a decedent who died in 2010 and whose executor filed Form 8939. Taxact returning user IF. Taxact returning user . Taxact returning user . Taxact returning user   THEN. Taxact returning user . Taxact returning user . Taxact returning user you inherited your home from a decedent who died either before or after 2010 or from a decedent who died in 2010 and whose executor did not file Form 8939. Taxact returning user 1 skip lines 1–4 of the worksheet. Taxact returning user 2 find your basis using the rules under Inherited Property in Publication 551. Taxact returning user Enter this amount on line 5 of the worksheet. Taxact returning user 3 fill out lines 6–13 of the worksheet. Taxact returning user you received your home as a gift 1 read Property Received as a Gift in Publication 551 and enter on lines 1 and 3 of the worksheet either the donor's adjusted basis or the home's fair market value at the time of the gift, whichever is appropriate. Taxact returning user 2 if you can add any federal gift tax to your basis, enter that amount on line 5 of the worksheet. Taxact returning user 3 fill out the rest of the worksheet. Taxact returning user you received your home as a trade for other property 1 enter on line 1 of the worksheet the fair market value of the other property at the time of the trade. Taxact returning user (But if you received your home as a trade for your previous home before May 7, 1997, and had a gain on the trade that you postponed using Form 2119, enter on line 1 of the worksheet the adjusted basis of the new home from that Form 2119. Taxact returning user ) 2 fill out the rest of the worksheet. Taxact returning user you built your home 1 add the purchase price of the land and the cost of building the home. Taxact returning user Enter that total on line 1 of the worksheet. Taxact returning user (However, if you filed a Form 2119 to postpone gain on the sale of a previous home before May 7, 1997, enter on line 1 of the worksheet the adjusted basis of the new home from that Form 2119. Taxact returning user ) 2 fill out the rest of the worksheet. Taxact returning user you received your home from your spouse after July 18, 1984 1 skip lines 1–4 of the worksheet. Taxact returning user 2 enter on line 5 of the worksheet your spouse's cost or other (adjusted) basis in the home just before you received it. Taxact returning user 3 fill out lines 6–13 of the worksheet, making adjustments to basis only for events after the transfer. Taxact returning user you owned a home jointly with your spouse, who transferred his or her interest in the home to you after July 18, 1984     fill out one worksheet, making adjustments to basis for events both before and after the transfer. Taxact returning user   you received your home from your spouse before July 19, 1984 1 skip lines 1–4 of the worksheet. Taxact returning user 2 enter on line 5 of the worksheet the home's fair market value at the time you received it. Taxact returning user 3 fill out lines 6–13 of the worksheet, making adjustments to basis only for events after the transfer. Taxact returning user you owned a home jointly with your spouse, and your spouse transferred his or her interest in the home to you before July 19, 1984 1 fill out a worksheet, lines 1–13, making adjustments to basis only for events before the transfer. Taxact returning user 2 multiply the amount on line 13 of that worksheet by 50% (0. Taxact returning user 50) to get the adjusted basis of your half-interest at the time of the transfer. Taxact returning user 3 multiply the fair market value of the home at the time of the transfer by 50% (0. Taxact returning user 50). Taxact returning user Generally, this is the basis of the half-interest that your spouse owned. Taxact returning user 4 add the amounts from steps 2 and 3 and enter the total on line 5 of a second worksheet. Taxact returning user 5 complete lines 6–13 of the second worksheet, making adjustments to basis only for events after the transfer. Taxact returning user you owned your home jointly with a nonspouse 1 fill out lines 1–13 of the worksheet. Taxact returning user 2 multiply the amount on line 13 by your percentage of ownership to get the adjusted basis of your part-interest. Taxact returning user Worksheet A Instructions. Taxact returning user (Continued) IF. Taxact returning user . Taxact returning user . Taxact returning user   THEN. Taxact returning user . Taxact returning user . Taxact returning user you owned your home jointly with your spouse who died before 2010 and before the casualty 1 fill out a worksheet, lines 1–13, including adjustments to basis only for events before your spouse's death. Taxact returning user 2 multiply the amount on line 13 of that worksheet by 50% (0. Taxact returning user 50) to get the adjusted basis of your half-interest on the date of death. Taxact returning user 3 figure the basis for the half-interest owned by your spouse. Taxact returning user This is one-half of the fair market value on the date of death (or later alternate valuation used for estate or inheritance tax). Taxact returning user (The basis in your half will remain one-half of the adjusted basis determined in step 2. Taxact returning user ) 4 add the amounts from steps 2 and 3 and enter the total on line 5 of a second worksheet. Taxact returning user 5 complete lines 6–13 of the second worksheet, making adjustments to basis only for events after your spouse's death. Taxact returning user you owned your home jointly with your spouse who died before 2010 and before the casualty, and your permanent legal home is in a community property state 1 skip lines 1–4 of the worksheet. Taxact returning user 2 enter the amount of your basis on line 5 of the worksheet. Taxact returning user Generally, this is the fair market value of the home at the time of death. Taxact returning user (But see Community Property in Publication 551 for special rules. Taxact returning user ) 3 fill out lines 6–13 of the worksheet, making adjustments to basis only for events after your spouse's death. Taxact returning user you owned your home jointly with a nonspouse who died before 2010 and before the casualty 1 fill out lines 1–13 of the worksheet, including adjustments to basis only for events before the co-owner's death. Taxact returning user 2 multiply the amount on line 13 by your percentage of ownership to get the adjusted basis of your part-interest on the date of death. Taxact returning user 3 multiply the fair market value on the date of death (or later alternate valuation used for estate or inheritance tax) by the co-owner's percentage of ownership. Taxact returning user This is the basis for the co-owner's part-interest. Taxact returning user 4 add the amounts from steps 2 and 3 and enter the total on line 5 of a second worksheet. Taxact returning user 5 complete lines 6–13 of the second worksheet, including adjustments to basis only for events after the co-owner's death. Taxact returning user your home was ever damaged as a result of a prior casualty 1 on line 8 of the worksheet, enter any amounts you spent to restore the home to its condition before the prior casualty. Taxact returning user 2 on line 11 enter: any insurance reimbursements you received (or expect to receive) for the prior loss,  and any deductible casualty losses from prior years not covered by insurance. Taxact returning user the person who sold you your home paid points on your loan and you bought your home after 1990 but before April 4, 1994. Taxact returning user   on line 2 enter the seller-paid points only if you deducted them as home mortgage interest in the year paid (unless you used the seller-paid points to reduce the amount on line 1). Taxact returning user the person who sold you your home paid points on your loan and you bought your home after April 3, 1994   on line 2 enter the seller-paid points even if you did not deduct them (unless you used the seller-paid points to reduce the amount on line 1). Taxact returning user you used part of the property as your home and part of it for business or to produce rental income   you must allocate the entries on Worksheet A between the personal part (column (a)) and the business/rental part (column (b)). Taxact returning user none of these items apply   fill out the entire worksheet. Taxact returning user Prev  Up  Next   Home   More Online Publications
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The Taxact Returning User

Taxact returning user Publication 929 - Main Content Table of Contents Part 1. Taxact returning user 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. Taxact returning user Designated as representative. Taxact returning user IRS notice. Taxact returning user Standard DeductionStandard Deduction of Zero Dependent's Own Exemption Withholding From WagesExceptions. Taxact returning user Part 2. Taxact returning user 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. Taxact returning user Figuring the Child's Net Unearned Income (Form 8615, Part I) Step 2. Taxact returning user Figuring a Tentative Tax at the Parent's Tax Rate (Form 8615, Part II) Step 3. Taxact returning user Figuring the Child's Tax (Form 8615, Part III) Alternative Minimum Tax Illustrated Example Part 1. Taxact returning user 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. Taxact returning user 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. Taxact returning user 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. Taxact returning user See Other Filing Requirements, later. Taxact returning user The following sections apply to dependents with: Earned income only, Unearned income only, and Both earned and unearned income. Taxact returning user  To find out whether a dependent must file, read the section that applies, or use Table 1. Taxact returning user 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. Taxact returning user 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). Taxact returning user Example. Taxact returning user William is 16. Taxact returning user His mother claims an exemption for him on her income tax return. Taxact returning user He worked part time on weekends during the school year and full time during the summer. Taxact returning user He earned $7,000 in wages. Taxact returning user He did not have any unearned income. Taxact returning user He must file a tax return because he has earned income only and his gross income is more than $6,100. Taxact returning user If he is blind, he does not have to file a return because his gross income is not more than $7,600. Taxact returning user 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. Taxact returning user 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). Taxact returning user Example. Taxact returning user Sarah is 18 and single. Taxact returning user Her parents can claim an exemption for her on their income tax return. Taxact returning user She received $1,970 of taxable interest and dividend income. Taxact returning user She did not work during the year. Taxact returning user She must file a tax return because she has unearned income only and her gross income is more than $1,000. Taxact returning user 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. Taxact returning user Election to report child's unearned income on parent's return. Taxact returning user   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. Taxact returning user See Parent's Election To Report Child's Interest and Dividends in Part 2. Taxact returning user If the parent makes this election, the child does not have to file a return. Taxact returning user 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. Taxact returning user Filing Requirement Worksheet for Most Dependents 1. Taxact returning user Enter dependent's earned income plus $350     2. Taxact returning user Minimum amount   $1,000 3. Taxact returning user Compare lines 1 and 2. Taxact returning user Enter the larger amount     4. Taxact returning user Maximum amount   6,100 5. Taxact returning user Compare lines 3 and 4. Taxact returning user Enter the smaller amount     6. Taxact returning user Enter the dependent's gross income. Taxact returning user If line 6 is more than line 5, the dependent must file an income tax return. Taxact returning user 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. Taxact returning user       Table 1. Taxact returning user 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. Taxact returning user   See the definitions of “dependent,”“earned income,”“unearned income,” and “gross income” in the Glossary. Taxact returning user   Single dependents—Were you either age 65 or older or blind?     No. Taxact returning user You must file a return if any of the following apply. Taxact returning user       Your unearned income was over $1,000. Taxact returning user Your earned income was over $6,100. Taxact returning user Your gross income was more than the larger of—       $1,000, or Your earned income (up to $5,750) plus $350. Taxact returning user         Yes. Taxact returning user You must file a return if any of the following apply. Taxact returning user     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). Taxact returning user       Married dependents—Were you either age 65 or older or blind?     No. Taxact returning user You must file a return if any of the following apply. Taxact returning user       Your gross income was at least $5 and your spouse files a separate return and itemizes deductions. Taxact returning user Your unearned income was over $1,000. Taxact returning user Your earned income was over $6,100. Taxact returning user Your gross income was more than the larger of—       $1,000, or Your earned income (up to $5,750) plus $350. Taxact returning user       Yes. Taxact returning user You must file a return if any of the following apply. Taxact returning user       Your gross income was at least $5 and your spouse files a separate return and itemizes deductions. Taxact returning user 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). Taxact returning user       Example 1. Taxact returning user Joe is 20, single, not blind, and a full-time college student. Taxact returning user He does not provide more than half of his own support, and his parents claim an exemption for him on their income tax return. Taxact returning user He received $200 taxable interest income and earned $2,750 from a part-time job. Taxact returning user 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). Taxact returning user Filled-in Example 1 Filing Requirement Worksheet  for Most Dependents 1. Taxact returning user Enter dependent's earned income plus $350   $ 3,100 2. Taxact returning user Minimum amount   1,000 3. Taxact returning user Compare lines 1 and 2. Taxact returning user Enter the larger amount   3,100 4. Taxact returning user Maximum amount   6,100 5. Taxact returning user Compare lines 3 and 4. Taxact returning user Enter the smaller amount   3,100 6. Taxact returning user Enter the dependent's gross income. Taxact returning user If line 6 is more than line 5, the dependent must file an income tax return. Taxact returning user 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. Taxact returning user   $ 2,950   Example 2. Taxact returning user The facts are the same as in Example 1 except that Joe had $600 taxable interest income. Taxact returning user 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). Taxact returning user Filled-in Example 2 Filing Requirement Worksheet for Most Dependents 1. Taxact returning user Enter dependent's earned income plus $350   $ 3,100 2. Taxact returning user Minimum amount   1,000 3. Taxact returning user Compare lines 1 and 2. Taxact returning user Enter the larger amount   3,100 4. Taxact returning user Maximum amount   6,100 5. Taxact returning user Compare lines 3 and 4. Taxact returning user Enter the smaller amount   3,100 6. Taxact returning user Enter the dependent's gross income. Taxact returning user If line 6 is more than line 5, the dependent must file an income tax return. Taxact returning user 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. Taxact returning user   $ 3,350   Age 65 or older or blind. Taxact returning user 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. Taxact returning user Filing Requirement Worksheet  for Dependents Who Are Age 65 or Older or Blind 1. Taxact returning user Enter dependent's earned income plus $350     2. Taxact returning user Minimum amount   $1,000 3. Taxact returning user Compare lines 1 and 2. Taxact returning user Enter the larger amount     4. Taxact returning user Maximum amount   6,100 5. Taxact returning user Compare lines 3 and 4. Taxact returning user Enter the smaller amount     6. Taxact returning user 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. Taxact returning user Add lines 5 and 6. Taxact returning user Enter the total     8. Taxact returning user Enter the dependent's gross income. Taxact returning user If line 8 is more than line 7, the dependent must file an income tax return. Taxact returning user 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. Taxact returning user The facts are the same as in Example 2 except that Joe is also blind. Taxact returning user 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). Taxact returning user   Filled-in Example 3 Filing Requirement Worksheet  for Dependents Who Are Age 65 or Older or Blind 1. Taxact returning user Enter dependent's earned income plus $350   $3,100 2. Taxact returning user Minimum amount   1,000 3. Taxact returning user Compare lines 1 and 2. Taxact returning user Enter the larger amount   3,100 4. Taxact returning user Maximum amount   6,100 5. Taxact returning user Compare lines 3 and 4. Taxact returning user Enter the smaller amount   3,100 6. Taxact returning user 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. Taxact returning user Add lines 5 and 6. Taxact returning user Enter the total   4,600 8. Taxact returning user Enter the dependent's gross income. Taxact returning user If line 8 is more than line 7, the dependent must file an income tax return. Taxact returning user 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. Taxact returning user 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. Taxact returning user But if the dependent is filing a return only because of this tax, the dependent can file Form 5329 by itself. Taxact returning user A dependent must also file a tax return if he or she: Had wages of $108. Taxact returning user 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. Taxact returning user Spouse itemizes. Taxact returning user   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). Taxact returning user 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. Taxact returning user Income tax was withheld from his or her income. Taxact returning user He or she qualifies for the earned income credit, additional child tax credit, health coverage tax credit, or refundable American opportunity education credit. Taxact returning user See the tax return instructions to find out who qualifies for these credits. Taxact returning user  By filing a return, the dependent can get a refund. Taxact returning user 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. Taxact returning user 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. Taxact returning user Signing the child's return. Taxact returning user   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. Taxact returning user ” Authority of parent or guardian. Taxact returning user   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. Taxact returning user   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. Taxact returning user 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. Taxact returning user Third party designee. Taxact returning user   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. Taxact returning user 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. Taxact returning user   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. Taxact returning user 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. Taxact returning user See the return instructions for more information. Taxact returning user Designated as representative. Taxact returning user   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. Taxact returning user Form 2848, Power of Attorney and Declaration of Representative, is used to designate a child's representative. Taxact returning user See Publication 947, Practice Before the IRS and Power of Attorney, for more information. Taxact returning user   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. Taxact returning user IRS notice. Taxact returning user   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. Taxact returning user The notice will show who to contact. Taxact returning user The IRS will try to resolve the matter with the parent(s) or guardian(s) of the child consistent with their authority. Taxact returning user Child's earnings. Taxact returning user   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. Taxact returning user This is true even if, under state law, the parent has the right to the earnings and may actually have received them. Taxact returning user If the child does not pay the tax due on this income, the parent may be liable for the tax. Taxact returning user Child's expenses. Taxact returning user   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. Taxact returning user Example. Taxact returning user You made payments on your child's behalf that are deductible as a business expense and a charitable contribution. Taxact returning user You made the payments out of your child's earnings. Taxact returning user These items can be deducted only on the child's return. Taxact returning user 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). Taxact returning user However, the standard deduction may be higher for a dependent who: Is 65 or older, or Is blind. Taxact returning user Certain dependents cannot claim any standard deduction. Taxact returning user See Standard Deduction of Zero , later. Taxact returning user Worksheet 1. Taxact returning user   Use Worksheet 1 to figure the dependent's standard deduction. Taxact returning user Worksheet 1. Taxact returning user Standard Deduction Worksheet for Dependents Use this worksheet only if someone else can claim you (or your spouse, if filing jointly) as a dependent. Taxact returning user If you were 65 or older and/or blind, check the correct number of boxes below. Taxact returning user Put the total number of boxes checked in box c and go to line 1. Taxact returning user a. Taxact returning user You 65 or older   Blind   b. Taxact returning user Your spouse, if claiming  spouse's exemption 65 or older   Blind   c. Taxact returning user Total boxes checked         1. Taxact returning user Enter your earned income (defined below) plus $350. Taxact returning user If none, enter -0-. Taxact returning user 1. Taxact returning user     2. Taxact returning user Minimum amount. Taxact returning user   2. Taxact returning user $1,000   3. Taxact returning user Compare lines 1 and 2. Taxact returning user Enter the larger of the two amounts here. Taxact returning user 3. Taxact returning user     4. Taxact returning user Enter on line 4 the amount shown below for your filing status. Taxact returning user       Single or Married filing separately—$6,100 Married filing jointly—$12,200 Head of household—$8,950 4. Taxact returning user     5. Taxact returning user Standard deduction. Taxact returning user         a. Taxact returning user Compare lines 3 and 4. Taxact returning user Enter the smaller amount here. Taxact returning user If under 65 and not blind, stop here. Taxact returning user This is your standard deduction. Taxact returning user Otherwise, go on to line 5b. Taxact returning user 5a. Taxact returning user     b. Taxact returning user If 65 or older or blind, multiply $1,500 ($1,200 if married) by the number in box c above. Taxact returning user Enter the result here. Taxact returning user 5b. Taxact returning user     c. Taxact returning user Add lines 5a and 5b. Taxact returning user This is your standard deduction for 2013. Taxact returning user 5c. Taxact returning user     Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. Taxact returning user It also includes any amount received as a scholarship that you must include in income. Taxact returning user   Example 1. Taxact returning user Michael is single, age 15, and not blind. Taxact returning user His parents can claim him as a dependent on their tax return. Taxact returning user He has taxable interest income of $800 and wages of $150. Taxact returning user He enters $500 (his earned income plus $350) on line 1 of Worksheet 1. Taxact returning user On line 3, he enters $1,000, the larger of $500 or $1,000. Taxact returning user Michael enters $6,100 on line 4. Taxact returning user On line 5a, he enters $1,000, the smaller of $1,000 or $6,100. Taxact returning user His standard deduction is $1,000. Taxact returning user Example 2. Taxact returning user Judy, a full-time student, is single, age 22, and not blind. Taxact returning user Her parents can claim her as a dependent on their tax return. Taxact returning user She has dividend income of $275 and wages of $2,500. Taxact returning user She enters $2,850 (her earned income plus $350) on line 1 of Worksheet 1. Taxact returning user On line 3, she enters $2,850, the larger of $2,850 or $1,000. Taxact returning user She enters $6,100 on line 4. Taxact returning user On line 5a, she enters $2,850 (the smaller of $2,850 or $6,100) as her standard deduction. Taxact returning user Example 3. Taxact returning user Amy, who is single, is claimed as a dependent on her parents' tax return. Taxact returning user She is 18 years old and blind. Taxact returning user She has taxable interest income of $1,000 and wages of $2,000. Taxact returning user She enters $2,350 (her earned income plus $350) on line 1 of Worksheet 1. Taxact returning user 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. Taxact returning user Because Amy is blind, she checks the box for blindness and enters “1” in box c at the top of Worksheet 1. Taxact returning user She enters $1,500 (the number in box c times $1,500) on line 5b. Taxact returning user Her standard deduction on line 5c is $3,850 ($2,350 + $1,500). Taxact returning user Standard Deduction of Zero The standard deduction for the following dependents is zero. Taxact returning user A married dependent filing a separate return whose spouse itemizes deductions. Taxact returning user 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. Taxact returning user A nonresident or dual-status alien dependent, unless the dependent is married to a U. Taxact returning user S. Taxact returning user citizen or resident alien at the end of the year and chooses to be treated as a U. Taxact returning user S. Taxact returning user resident for the year. Taxact returning user See Publication 519, U. Taxact returning user S. Taxact returning user Tax Guide for Aliens, for information on making this choice. Taxact returning user Example. Taxact returning user Jennifer, who is a dependent of her parents, is entitled to file a joint return with her husband. Taxact returning user However, her husband elects to file a separate return and itemize his deductions. Taxact returning user Because he itemizes, Jennifer's standard deduction on her return is zero. Taxact returning user She can, however, itemize any of her allowable deductions. Taxact returning user 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. Taxact returning user This is true even if the other taxpayer does not actually claim the exemption. Taxact returning user Example. Taxact returning user James and Barbara can claim their child, Ben, as a dependent on their return. Taxact returning user Ben is a college student who works during the summer and must file a tax return. Taxact returning user Ben cannot claim his own exemption on his return. Taxact returning user This is true even if James and Barbara do not claim him as a dependent on their return. Taxact returning user Withholding From Wages Employers generally withhold federal income tax, social security tax, and Medicare tax from an employee's wages. Taxact returning user If the employee claims exemption from withholding on Form W-4, the employer will not withhold federal income tax. Taxact returning user The exemption from withholding does not apply to social security and Medicare taxes. Taxact returning user Conditions for exemption from withholding. Taxact returning user   An employee can claim exemption from withholding for 2014 only if he or she meets both of the following conditions. Taxact returning user For 2013, the employee had a right to a refund of all federal income tax withheld because he or she had no tax liability. Taxact returning user For 2014, the employee expects a refund of all federal income tax withheld because he or she expects to have no tax liability. Taxact returning user Dependents. Taxact returning user   An employee who is a dependent ordinarily cannot claim exemption from withholding if both of the following are true. Taxact returning user The employee's gross income will be more than $1,000, the minimum standard deduction for 2014. Taxact returning user The employee's unearned income will be more than $350. Taxact returning user Exceptions. Taxact returning user   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. Taxact returning user The above exceptions do not apply to supplemental wages greater than $1,000,000. Taxact returning user For more information, see Exemption From Withholding in chapter 1 of Publication 505. Taxact returning user Example. Taxact returning user Guy is 17 and a student. Taxact returning user During the summer he works part time at a grocery store. Taxact returning user He expects to earn about $1,200 this year. Taxact returning user 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. Taxact returning user The only other income he expects during the year is $375 interest on a savings account. Taxact returning user He expects that his parents will be able to claim him as a dependent on their tax return. Taxact returning user He is not blind and will not claim adjustments to income, itemized deductions, a higher standard deduction, or tax credits on his return. Taxact returning user 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. Taxact returning user Claiming exemption from withholding. Taxact returning user    To claim exemption from withholding, an employee must enter “Exempt” in the space provided on Form W-4, line 7. Taxact returning user The employee must complete the rest of the form, as explained in the form instructions, and give it to his or her employer. Taxact returning user Renewing an exemption from withholding. Taxact returning user   An exemption from withholding is good for only one year. Taxact returning user An employee must file a new Form W-4 by February 15 each year to continue the exemption. Taxact returning user Part 2. Taxact returning user Tax on Unearned Income of Certain Children The two rules that follow may affect the tax on the unearned income of certain children. Taxact returning user 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. Taxact returning user (See Parent's Election To Report Child's Interest and Dividends , later. Taxact returning user ) 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. Taxact returning user (See Tax for Certain Children Who Have Unearned Income , later. Taxact returning user ) For these rules, the term “child” includes a legally adopted child and a stepchild. Taxact returning user These rules apply whether or not the child is a dependent. Taxact returning user These rules do not apply if neither of the child's parents were living at the end of the year. Taxact returning user 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. Taxact returning user 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 . Taxact returning user 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. Taxact returning user Only the parent whose tax return is used can make the election described under Parent's Election To Report Child's Interest and Dividends . Taxact returning user Parents are married. Taxact returning user   If the child's parents file separate returns, use the return of the parent with the greater taxable income. Taxact returning user Parents not living together. Taxact returning user   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. Taxact returning user If the custodial parent is not considered unmarried, use the return of the parent with the greater taxable income. Taxact returning user   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. Taxact returning user Parents are divorced. Taxact returning user   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. Taxact returning user Custodial parent remarried. Taxact returning user   If the custodial parent has remarried, the stepparent (rather than the noncustodial parent) is treated as the child's other parent. Taxact returning user Therefore, if the custodial parent and the stepparent file a joint return, use that joint return. Taxact returning user Do not use the return of the noncustodial parent. Taxact returning user   If the custodial parent and the stepparent are married, but file separate returns, use the return of the one with the greater taxable income. Taxact returning user If the custodial parent and the stepparent are married but not living together, the earlier discussion under Parents not living together applies. Taxact returning user Parents never married. Taxact returning user   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. Taxact returning user If the parents did not live together all year, the rules explained earlier under Parents are divorced apply. Taxact returning user Widowed parent remarried. Taxact returning user   If a widow or widower remarries, the new spouse is treated as the child's other parent. Taxact returning user The rules explained earlier under Custodial parent remarried apply. Taxact returning user 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. Taxact returning user If you do, your child will not have to file a return. Taxact returning user You can make this election only if all the following conditions are met. Taxact returning user Your child was under age 19 (or under age 24 if a full-time student) at the end of the year. Taxact returning user Your child had income only from interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends). Taxact returning user The child's gross income was less than $10,000. Taxact returning user The child is required to file a return unless you make this election. Taxact returning user The child does not file a joint return for the year. Taxact returning user 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. Taxact returning user No federal income tax was withheld from your child's income under the backup withholding rules. Taxact returning user You are the parent whose return must be used when applying the special tax rules for children. Taxact returning user (See Which Parent's Return To Use , earlier. Taxact returning user ) These conditions are also shown in Figure 1. Taxact returning user Certain January 1 birthdays. Taxact returning user   A child born on January 1, 1995, is considered to be age 19 at the end of 2013. Taxact returning user You cannot make this election for such a child unless the child was a full-time student. Taxact returning user   A child born on January 1, 1990, is considered to be age 24 at the end of 2013. Taxact returning user You cannot make this election for such a child. Taxact returning user How to make the election. Taxact returning user    Make the election by attaching Form 8814 to your Form 1040 or Form 1040NR. Taxact returning user (If you make this election, you cannot file Form 1040A or Form 1040EZ. Taxact returning user ) Attach a separate Form 8814 for each child for whom you make the election. Taxact returning user You can make the election for one or more children and not for others. Taxact returning user Effect of Making the Election The federal income tax on your child's income may be more if you make the Form 8814 election. Taxact returning user Rate may be higher. Taxact returning user   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. Taxact returning user This is because the tax rate on the child's income between $1,000 and $2,000 is 10% if you make this election. Taxact returning user 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. Taxact returning user Deductions you cannot take. Taxact returning user   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. Taxact returning user The additional standard deduction if the child is blind. Taxact returning user The deduction for a penalty on an early withdrawal of your child's savings. Taxact returning user Itemized deductions (such as your child's investment expenses or charitable contributions). Taxact returning user Figure 1. Taxact returning user Can You Include Your Child's Income On Your Tax Return? Please click here for the text description of the image. Taxact returning user Figure 1. Taxact returning user Can You Include Your Child's Income On Your Tax Return? Deductible investment interest. Taxact returning user   If you use Form 8814, your child's unearned income is considered your unearned income. Taxact returning user To figure the limit on your deductible investment interest, add the child's unearned income to yours. Taxact returning user 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. Taxact returning user Alternative minimum tax. Taxact returning user    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. Taxact returning user If it is, you must include it with your own tax preference items when figuring your AMT. Taxact returning user See Form 6251, Alternative Minimum Tax—Individuals, and its instructions for details. Taxact returning user Reduced deductions or credits. Taxact returning user   If you use Form 8814, your increased adjusted gross income may reduce certain deductions or credits on your return, including the following. Taxact returning user Deduction for contributions to a traditional individual retirement arrangement (IRA). Taxact returning user Deduction for student loan interest. Taxact returning user Itemized deductions for medical expenses, casualty and theft losses, and certain miscellaneous expenses. Taxact returning user Credit for child and dependent care expenses. Taxact returning user Child tax credit. Taxact returning user Education tax credits. Taxact returning user Earned income credit. Taxact returning user Penalty for underpayment of estimated tax. Taxact returning user   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. Taxact returning user 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. Taxact returning user Get Publication 505 for more information. Taxact returning user Figuring Child's Income Use Form 8814, Part I, to figure your child's interest and dividend income to report on your return. Taxact returning user Only the amount over $2,000 is added to your income. Taxact returning user The amount over $2,000 is shown on Form 8814, line 6. Taxact returning user Unless the child's income includes qualified dividends or capital gain distributions (discussed next), the same amount is shown on Form 8814, line 12. Taxact returning user Include the amount from Form 8814, line 12, on Form 1040 or Form 1040NR, line 21. Taxact returning user 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. Taxact returning user On the dotted line next to line 21, enter “Form 8814” and the total of the Form 8814, line 12 amounts. Taxact returning user Note. Taxact returning user The tax on the first $2,000 is figured on Form 8814, Part II. Taxact returning user See Figuring Additional Tax , later. Taxact returning user Qualified dividends. Taxact returning user   Enter on Form 8814, line 2a, any ordinary dividends your child received. Taxact returning user This amount may include qualified dividends. Taxact returning user 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. Taxact returning user For detailed information about qualified dividends, see Publication 550. Taxact returning user   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. Taxact returning user You do not include these dividends on Form 8814, line 12, or on line 21 of Form 1040 or Form 1040NR. Taxact returning user   Enter the child's qualified dividends on Form 8814, line 2b. Taxact returning user But do not include this amount on Form 1040, lines 9a and 9b, or Form 1040NR, lines 10a and 10b. Taxact returning user Instead, include the amount from Form 8814, line 9, on Form 1040, lines 9a and 9b, or Form 1040NR, lines 10a and 10b. Taxact returning user (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. Taxact returning user ) Capital gain distributions. Taxact returning user   Enter on Form 8814, line 3, any capital gain distributions your child received. Taxact returning user 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. Taxact returning user You do not include it on Form 8814, line 12, or on line 21 of Form 1040 or Form 1040NR. Taxact returning user   Include the amount from Form 8814, line 10, on Schedule D, line 13; Form 1040, line 13; or Form 1040NR, line 14, whichever applies. Taxact returning user (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. Taxact returning user ) Collectibles (28% rate) gain. Taxact returning user    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. Taxact returning user Multiply the child's capital gain distribution included on Schedule D, line 13, by a fraction. Taxact returning user The numerator is the part of the child's total capital gain distribution that is collectibles (28% rate) gain. Taxact returning user The denominator is the child's total capital gain distribution. Taxact returning user Enter the result on line 4 of the 28% Rate Gain Worksheet. Taxact returning user Unrecaptured section 1250 gain. Taxact returning user   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. Taxact returning user Multiply the child's capital gain distribution included on Schedule D, line 13, by a fraction. Taxact returning user The numerator is the part of the child's total capital gain distribution that is unrecaptured section 1250 gain. Taxact returning user The denominator is the child's total capital gain distribution. Taxact returning user Enter the result on the Unrecaptured Section 1250 Gain Worksheet, line 11. Taxact returning user Section 1202 gain. Taxact returning user   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. Taxact returning user (For information about the exclusion, see chapter 4 of Publication 550. Taxact returning user ) To figure that part, multiply the child's capital gain distribution included on Schedule D, line 13, by a fraction. Taxact returning user The numerator is the part of the child's total capital gain distribution that is section 1202 gain. Taxact returning user The denominator is the child's total capital gain distribution. Taxact returning user Your section 1202 exclusion is generally 50% of the result, but may be subject to a limit. Taxact returning user In some cases, the exclusion is more than 50%. Taxact returning user See the instructions for Schedule D for details and information on how to report the exclusion amount. Taxact returning user Example. Taxact returning user Fred is 6 years old. Taxact returning user 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. Taxact returning user (None of the distributions were reported on Form 1099-DIV as unrecaptured section 1250 gain, section 1202 gain, or collectibles (28% rate) gain. Taxact returning user ) All of the ordinary dividends are qualified dividends. Taxact returning user He has no other income and is not subject to backup withholding. Taxact returning user No estimated tax payments were made under his name and social security number. Taxact returning user Fred's parents elect to include Fred's income on their tax return instead of filing a return for him. Taxact returning user 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. Taxact returning user They leave lines 1a and 1b of Form 8814 blank because Fred does not have any interest income. Taxact returning user They enter his ordinary dividends of $1,575 on lines 2a and 2b because all of Fred's ordinary dividends are qualified dividends. Taxact returning user They enter the amount of Fred's capital gain distributions, $525, on line 3. Taxact returning user Next, they add the amounts on lines 1a, 2a, and 3 and enter the result, $2,100, on line 4. Taxact returning user 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. Taxact returning user This is the total amount from Form 8814 to be reported on their return. Taxact returning user Next, they figure how much of this amount is qualified dividends and how much is capital gain distributions. Taxact returning user They divide the amount on line 2b, $1,575, by the amount on line 4, $2,100. Taxact returning user They enter the result, . Taxact returning user 75, on line 7. Taxact returning user They divide the amount on line 3, $525, by the amount on line 4, $2,100. Taxact returning user They enter the result, . Taxact returning user 25, on line 8. Taxact returning user They multiply the amount on line 6, $100, by the decimal on line 7, . Taxact returning user 75, and enter the result, $75, on line 9. Taxact returning user They multiply the amount on line 6, $100, by the decimal on line 8, . Taxact returning user 25, and enter the result, $25, on line 10. Taxact returning user 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. Taxact returning user 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. Taxact returning user They enter $100 ($75 + $25) on line 11 and -0- ($100 – $100) on line 12. Taxact returning user Because the amount on line 12 is -0-, they do not include any amount from Form 8814 on their Form 1040, line 21. Taxact returning user 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. Taxact returning user This tax is added to the tax figured on your income. Taxact returning user This additional tax is the smaller of: 10% x (your child's gross income − $1,000), or $100. Taxact returning user Include the amount from line 15 of all your Forms 8814 in the total on Form 1040, line 44, or Form 1040NR, line 42. Taxact returning user Check box a on Form 1040, line 44, or Form 1040NR, line 42. Taxact returning user 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. Taxact returning user 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. Taxact returning user Attach the completed form to the child's Form 1040, Form 1040A, or Form 1040NR. Taxact returning user When Form 8615 must be filed. Taxact returning user   Form 8615 must be filed for a child if all of the following statements are true. Taxact returning user The child's unearned income was more than $2,000. Taxact returning user The child is required to file a return for 2013. Taxact returning user 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. Taxact returning user At least one of the child's parents was alive at the end of 2013. Taxact returning user The child does not file a joint return for 2013. Taxact returning user These conditions are also shown in Figure 2. Taxact returning user Certain January 1 birthdays. Taxact returning user   Use the following chart to determine whether certain children with January 1 birthdays meet condition 3 under When Form 8615 must be filed. Taxact returning user IF a child was born on. Taxact returning user . Taxact returning user . Taxact returning user THEN, at the end of 2013, the child is considered to be. Taxact returning user . Taxact returning user . Taxact returning user January 1, 1996 18* January 1, 1995 19** January 1, 1990 24*** *This child is not under age 18. Taxact returning user The child meets condition 3 only if the child did not have earned income that was more than half of the child's support. Taxact returning user  **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. Taxact returning user  ***Do not use Form 8615 for this child. Taxact returning user Figure 2. Taxact returning user Do You Have To Use Form 8615 To Figure Your Child's Tax? Please click here for the text description of the image. Taxact returning user Figure 2. Taxact returning user 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. Taxact returning user (If the parents filed a joint return, enter the name and social security number listed first on the joint return. Taxact returning user ) On line C, check the box for the parent's filing status. Taxact returning user See Which Parent's Return To Use, earlier, for information on which parent's return information must be used on Form 8615. Taxact returning user Parent with different tax year. Taxact returning user   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. Taxact returning user Example. Taxact returning user Kimberly must use her mother's tax and taxable income to complete her Form 8615 for calendar year 2013 (January 1 – December 31). Taxact returning user Kimberly's mother files her tax return on a fiscal year basis (July 1 – June 30). Taxact returning user Kimberly must use the information on her mother's return for the tax year ending June 30, 2013, to complete her 2013 Form 8615. Taxact returning user Parent's return information not known timely. Taxact returning user   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. Taxact returning user   You can use any reasonable estimate. Taxact returning user This includes using information from last year's return. Taxact returning user If you use an estimated amount on Form 8615, enter “Estimated” on the line next to the amount. Taxact returning user   When you get the correct information, file an amended return on Form 1040X, Amended U. Taxact returning user S. Taxact returning user Individual Income Tax Return. Taxact returning user Extension of time to file. Taxact returning user   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. Taxact returning user S. Taxact returning user Individual Income Tax Return. Taxact returning user See the instructions for Form 4868 for details. Taxact returning user    An extension of time to file is not an extension of time to pay. Taxact returning user You must make an accurate estimate of the tax for 2013. Taxact returning user 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. Taxact returning user See Form 4868 and its instructions. Taxact returning user Parent's return information not available. Taxact returning user   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). Taxact returning user How to request. Taxact returning user   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. Taxact returning user (The IRS cannot process a request received before the end of the tax year. Taxact returning user )    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. Taxact returning user   The request must contain all of the following. Taxact returning user 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. Taxact returning user Proof of the child's age (for example, a copy of the child's birth certificate). Taxact returning user 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). Taxact returning user 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. Taxact returning user    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. Taxact returning user Step 1. Taxact returning user 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. Taxact returning user To do that, use Form 8615, Part I. Taxact returning user 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. Taxact returning user Adjusted gross income is shown on Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37. Taxact returning user Form 1040EZ and Form 1040NR-EZ cannot be used if Form 8615 must be filed. Taxact returning user 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. Taxact returning user 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. Taxact returning user Alternate Worksheet for Form 8615, Line 1 A. Taxact returning user Enter the amount from the child's Form 1040, line 22, or Form 1040NR, line 23   B. Taxact returning user 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. Taxact returning user Enter this total as a positive number (greater than zero)   C. Taxact returning user Add line A and line B and  enter the total   D. Taxact returning user 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. Taxact returning user Subtract line D from line C. Taxact returning user Enter the result here and on Form 8615, line 1   Unearned income defined. Taxact returning user   Unearned income is generally all income other than salaries, wages, and other amounts received as pay for work actually performed. Taxact returning user 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. Taxact returning user 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). Taxact returning user Nontaxable income. Taxact returning user   For this purpose, unearned income includes only amounts the child must include in gross income. Taxact returning user Nontaxable unearned income, such as tax-exempt interest and the nontaxable part of social security and pension payments, is not included. Taxact returning user Capital loss. Taxact returning user   A child's capital losses are taken into account in figuring the child's unearned income. Taxact returning user Capital losses are first applied against capital gains. Taxact returning user 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. Taxact returning user Any difference over $3,000 is carried to the next year. Taxact returning user Income from property received as a gift. Taxact returning user   A child's unearned income includes all income produced by property belonging to the child. Taxact returning user 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. Taxact returning user   A child's unearned income includes income produced by property given as a gift to the child. Taxact returning user This includes gifts to the child from grandparents or any other person and gifts made under the Uniform Gift to Minors Act. Taxact returning user Example. Taxact returning user Amanda Black, age 13, received the following income. Taxact returning user 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. Taxact returning user Amanda's unearned income is $2,100. Taxact returning user This is the total of the dividends ($800), taxable interest ($1,200), and capital gains reduced by capital losses ($300 − $200 = $100). Taxact returning user Her wages are earned (not unearned) income because they are received for work actually performed. Taxact returning user Her tax-exempt interest is not included because it is nontaxable. Taxact returning user Trust income. Taxact returning user   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. Taxact returning user   However, taxable distributions from a qualified disability trust are considered earned income for the purposes of completing Form 8615. Taxact returning user See the Form 8615 instructions for details. Taxact returning user Adjustment to income. Taxact returning user   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. Taxact returning user Line 2 (Deductions) If the child does not itemize deductions on Schedule A (Form 1040 or Form 1040NR), enter $2,000 on line 2. Taxact returning user 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. Taxact returning user Directly connected. Taxact returning user   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. Taxact returning user These expenses include custodian fees and service charges, service fees to collect taxable interest and dividends, and certain investment counsel fees. Taxact returning user    These expenses are added to certain other miscellaneous itemized deductions on Schedule A (Form 1040). Taxact returning user Only the amount greater than 2% of the child's adjusted gross income can be deducted. Taxact returning user See Publication 529, Miscellaneous Deductions, for more information. Taxact returning user Example 1. Taxact returning user 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. Taxact returning user His adjusted gross income is $8,000, which is entered on Form 1040, line 38, and on Form 8615, line 1. Taxact returning user 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. Taxact returning user Example 2. Taxact returning user Eleanor, age 8, has unearned income of $16,000 and an early withdrawal penalty of $100. Taxact returning user She has no other income. Taxact returning user 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. Taxact returning user Her adjusted gross income, entered on line 1, is $15,900 ($16,000 − $100). Taxact returning user The amount on line 2 is $2,050. Taxact returning user This is the larger of: $1,000 plus the $1,050 of directly connected itemized deductions, or $2,000. Taxact returning user Line 3 Subtract line 2 from line 1 and enter the result on this line. Taxact returning user If zero or less, do not complete the rest of the form. Taxact returning user However, you must still attach Form 8615 to the child's tax return. Taxact returning user Figure the tax on the child's taxable income in the normal manner. Taxact returning user 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. Taxact returning user Child files Form 2555 or 2555-EZ. Taxact returning user   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. Taxact returning user Enter the amount from line 3 of the Foreign Earned Income Tax Worksheet as the child's taxable income on Form 8615, line 4. Taxact returning user Line 5 (Net Unearned Income) A child's net unearned income cannot be more than his or her taxable income. Taxact returning user Enter on Form 8615, line 5, the smaller of line 3 or line 4. Taxact returning user This is the child's net unearned income. Taxact returning user If zero or less, do not complete the rest of the form. Taxact returning user However, you must still attach Form 8615 to the child's tax return. Taxact returning user Figure the tax on the child's taxable income in the normal manner. Taxact returning user Step 2. Taxact returning user 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. Taxact returning user 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. Taxact returning user 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. Taxact returning user For example, do not refigure the medical expense deduction. Taxact returning user Figure the tentative tax on Form 8615, lines 6 through 13. Taxact returning user 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. Taxact returning user If the parent's taxable income is zero or less, enter zero on line 6. Taxact returning user Parent files Form 2555 or 2555-EZ. Taxact returning user   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. Taxact returning user 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. Taxact returning user 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. Taxact returning user Do not include the amount from line 5 of the Form 8615 being completed. Taxact returning user (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. Taxact returning user ) Example. Taxact returning user Paul and Jane Persimmon have three children, Sharon, Jerry, and Mike, who must attach Form 8615 to their tax returns. Taxact returning user 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. Taxact returning user Line 7 of Jerry's Form 8615 will show $1,800 ($800 + $1,000). Taxact returning user Line 7 of Mike's Form 8615 will show $1,400 ($800 + $600). Taxact returning user Other children's information not available. Taxact returning user   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. Taxact returning user Estimates and extensions are discussed earlier under Providing Parental Information (Form 8615, Lines A–C) . Taxact returning user Line 8 (Parent's Taxable Income Plus Children's Net Unearned Income) Enter on this line the total of lines 5, 6, and 7. Taxact returning user You must determine the amount of net capital gain and qualified dividends included on this line before completing Form 8615, line 9. Taxact returning user Net capital gain. Taxact returning user   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. Taxact returning user If Schedule D is not required, it is the amount on Form 1040, line 13; Form 1040A, line 10; or Form 1040NR, line 14. Taxact returning user Qualified dividends. Taxact returning user   Qualified dividends are those dividends reported on line 9b of Form 1040 or Form 1040A, or line 10b of Form 1040NR. Taxact returning user Net capital gain and qualified dividends on line 8. Taxact returning user   If neither the child, nor the parent, nor any other child has net capital gain, the net capital gain on line 8 is zero. Taxact returning user   If neither the child, nor the parent, nor any other child has qualified dividends, the amount of qualified dividends on line 8 is zero. Taxact returning user   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. Taxact returning user   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. Taxact returning user   Use the instructions for Form 8615, line 8, including the appropriate Line 5 Worksheet, to find these amounts. Taxact returning user See the instructions for Form 8615 for more details. Taxact returning user Note. Taxact returning user The amount of any net capital gain or qualified dividends is not separately reported on line 8. Taxact returning user It is  needed, however, when figuring the tax on line 9. Taxact returning user 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. Taxact returning user 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. Taxact returning user 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. Taxact returning user If line 8 includes any net capital gain or qualified dividends, use the Qualified Dividends and Capital Gain Tax Worksheet to figure this tax. Taxact returning user For details, see the instructions for Form 8615, line 9. Taxact returning user However, if the child, parent, or any other child has 28% rate gain or unrecaptured section 1250 gain, use the Schedule D Tax Worksheet. Taxact returning user But if Schedule J is used to figure the tax on the parent's return, use it to figure this tax. Taxact returning user Child files Form 2555 or 2555-EZ. Taxact returning user   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. Taxact returning user Using the Schedule D Tax Worksheet for line 9 tax. Taxact returning user    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. Taxact returning user 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. Taxact returning user Then figure the line 9 tax using another Schedule D Tax Worksheet. Taxact returning user (Do not attach this Schedule D Tax Worksheet to the child's return. Taxact returning user )   Complete this Schedule D Tax Worksheet as follows. Taxact returning user On line 1, enter the amount from Form 8615, line 8. Taxact returning user On line 2, enter the qualified dividends included on Form 8615, line 8. Taxact returning user (See the earlier discussion for line 8. Taxact returning user ) 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. Taxact returning user 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. Taxact returning user If applicable, include instead the smaller amount entered on the dotted line next to line 4e. Taxact returning user On lines 5 and 6, follow the worksheet instructions. Taxact returning user On line 7, enter the net capital gain included on Form 8615, line 8. Taxact returning user (See the earlier discussion for line 8. Taxact returning user ) On lines 8 through 10, follow the worksheet instructions. Taxact returning user 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). Taxact returning user 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. Taxact returning user Figure these amounts as explained later under Figuring unrecaptured section 1250 gain (line 11) and Figuring 28% rate gain (line 11). Taxact returning user 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. Taxact returning user Otherwise, skip steps 10, 11, and 12 below, and go to step 13. Taxact returning user Determine whether there is a line 8 capital gain excess as follows. Taxact returning user 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. Taxact returning user (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. Taxact returning user ) Subtract (a) from the amount on line 1 of this Schedule D Tax Worksheet. Taxact returning user Subtract (b) from the amount on line 10 of this Schedule D Tax Worksheet. Taxact returning user If the result is more than zero, that amount is the line 8 capital gain excess. Taxact returning user If the result is zero or less, there is no line 8 capital gain excess. Taxact returning user If there is no line 8 capital gain excess, skip step 12 below and go to step 13. Taxact returning user 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. Taxact returning user (These modifications are to be made only for purposes of filling out this additional Schedule D Tax Worksheet. Taxact returning user ) Reduce the amount you would otherwise enter on line 9 (but not below zero) by the line 8 capital gain excess. Taxact returning user 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. Taxact returning user 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. Taxact returning user 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. Taxact returning user Complete lines 12 through 45 following the worksheet instructions. Taxact returning user Use the parent's filing status to complete lines 15, 42, and 44. Taxact returning user Enter the amount from line 45 of this Schedule D Tax Worksheet on Form 8615, line 9, and check the box on that line