Kiddie Tax Unearned Income Calculator
Calculate tax on child's unearned income at parent's rate.
Kiddie Tax Status
Child Age:15
Age Limit:24
Kiddie Tax:APPLIES
Tax Tier Breakdown
| Tier | Amount | Rate | Tax |
|---|---|---|---|
| Tier 1 (Tax-Free) | $ 1250 | 0% | $ 0 |
| Tier 2 (Child Rate) | $ 1250 | 10% | $ 125 |
| Tier 3 (Parent Rate) | $ 12500 | 24% | $ 3000 |
| Total Unearned Tax | $ 15000 | $ 3125 |
Comparison
With Kiddie Tax
Unearned Tax:$ 3125
Earned Tax:$ 175
Total:$ 3300
At Child's Rate Only
Unearned Tax:$ 1375
Extra Kiddie Tax:$ 1750
Filing Options
Threshold:$ 2500
Parent Include:Not Allowed
Not eligible - must file separate return
Recommendation
Kiddie tax applies. Unearned income $15000 exceeds $2500. Must file Form 8615 with child's return. Tier 1: $1250 tax-free. Tier 2: $1250 at 10%. Tier 3: $12500 at 24%. Total: $3125.
Avoidance Strategies
- Invest in tax-free municipal bonds
- Use tax-deferred accounts (529, Roth)
- Delay realization of gains until 19/24
- Invest in growth stocks (no dividends)
- Gift appreciated assets (child sells)
Kiddie Tax Key Points
- Applies under 19, or under 24 if student
- First $1,250 tax-free (2024)
- Next $1,250 at child's 10% rate
- Above $2,500 at parent's rate
- Form 8615 for separate filing
- Parent election if $2,500-$11,000
- Only unearned income affected
- Earned income taxed normally
- Use tax-free investments
- Plan timing of gains