I feel really dumb to ask this, but I got a 1099-INT from the bank for him. He has a 90-Day add on certificate worth about $2500 right now and he earned $42 in interest last year. Do I have to file for him?
2007-01-22 09:59:56 · 13 answers · asked by NCMOMMAAC 3 in Business & Finance ➔ Taxes ➔ United States
It's not dumb - you can see by the variety of answers that you got that it's not something everyone knows. People who don't know, of course, should not be answering tax questions here, but that's a separate issue.
With income of $42, no, you don't have to do anything with it. If his investment income was over $1700, you might have to do some computing, and he might have to file something or else you'd include it on your return. If it was over $850, he'd either have to file or you'd have to include it. But at $42, if that's his total income, no reporting or filing is needed.
2007-01-22 10:45:19 · answer #1 · answered by Judy 7 · 2⤊ 1⤋
NO. The amount is not consequential. The bank must issue a 1099. They have no way of knowing what other earned income, your child has and could possibly need to file a tax return. Under the circumstances, the 1099 was issued but you DON'T have to file if that is the only income under the child's name and social security number.
I am sure that you are aware that there are children of even age 2 or less who have substantial income credited to them. That happens with the awesome rich who from the date of birth establish substantial trust funds for their kids.
2007-01-22 18:08:06 · answer #2 · answered by Notorious 4 · 3⤊ 2⤋
Judy appears to have the best answer so far. The link below is the IRS Publication that led me to that conclusion.
2007-01-22 19:05:32 · answer #3 · answered by STEVEN F 7 · 0⤊ 0⤋
If you are claiming your child as a dependent and he only has unearned income (e.g. interest, dividends, etc.), then you only need to file a return if the amount is greater than $850. See IRS Publication 929 for more information:
http://www.irs.gov/publications/p929/ar02.html#d0e402
If taxes were withheld from his unearned income, you should file a return to get a refund.
2007-01-22 18:20:54 · answer #4 · answered by Ian 3 · 2⤊ 1⤋
Don't bother.
Any income earned under a certain amount does not require a return. I don't know what the limit is, but it's in the thousands.
2007-01-22 18:04:26 · answer #5 · answered by Uncle Pennybags 7 · 1⤊ 3⤋
Yes, your 2 year old has to file. Since you are claiming him as a dependent, and the interest is unearned income, it is taxable to him and there will be no standard deduction or personal exemption to offset it. Also, since he is under 14, he will be taxed on that $42 at your marginal rate. So if your tax bracket is 28%, his federal tax on that $42 will be $12.
You can however, elect to report his interest income on your return and you will be taxed on it. You will need to prepare Form 8814 for this.
2007-01-22 18:21:30 · answer #6 · answered by jseah114 6 · 0⤊ 4⤋
Just add it to your interest income. You're probably a co-account holder for his bank account.
2007-01-22 18:07:32 · answer #7 · answered by Anonymous · 0⤊ 2⤋
Nah...unless he/she made a ton of money last year...
2007-01-22 18:06:15 · answer #8 · answered by Anonymous · 0⤊ 3⤋
No
2007-01-22 18:03:10 · answer #9 · answered by Cerebal 3 · 2⤊ 3⤋
Just do it! He may get a refund! www.irs.gov has many answers.
2007-01-22 18:07:41 · answer #10 · answered by Anonymous · 0⤊ 5⤋