CONGRESS CLOSES A TAX PLANNING LOOPHOLE FOR FAMILIES
The 2007 Small Business Tax Act extends the reach of the "kiddie tax" by raising the age limit to include (1) all children under age 19 (previously under age 18) and (2) studenta under age 24. Both changes are effective for tax years beginning after May 25, 2007
There is some bad news It is not until 2008 that capital gain for those in the 15% or lower tax bracket fall to zero rather than the 5%. That zero no-tax rate remains through 2010. Many lawmakers earlier this year called for preventing dependents under age 24 from using the zero percent rate. The new law covers this 'loophole' and more by expanding the kiddie tax
Kiplinger
The 2007 Small Business Tax Act extends the reach of the "kiddie tax" by raising the age limit to include (1) all children under age 19 (previously under age 18) and (2) studenta under age 24. Both changes are effective for tax years beginning after May 25, 2007
There is some bad news It is not until 2008 that capital gain for those in the 15% or lower tax bracket fall to zero rather than the 5%. That zero no-tax rate remains through 2010. Many lawmakers earlier this year called for preventing dependents under age 24 from using the zero percent rate. The new law covers this 'loophole' and more by expanding the kiddie tax
Kiplinger
posted by Milt Baker CPA | 12:32 PM
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