Need urgent help with Form 8615 for my teenager - filing kiddie tax for first time!

Form 8615 can definitely be confusing the first time you encounter it! It's used when a child has unearned income (like those investments) over a certain threshold. Here's what you need to know: Your daughter will need to file her own tax return since she has earned income from her job. The Form 8615 comes into play because she has investment income and meets the age requirement (under 19, or under 24 if full-time student). The "kiddie tax" basically means her investment income might be taxed at your rate instead of hers. She'll file her own return reporting both the job income ($4,200) and investment income ($1,800). The Form 8615 will calculate how much of that investment income is taxed at your rate. You'll need to provide some information from your return to complete her Form 8615. You don't include her earned income (the $4,200) on your return at all. You'll only need certain information from your return to help complete her Form 8615.

I went through this exact nightmare last year with my son's first investment income. I spent HOURS trying to figure it out until I found https://taxr.ai which literally saved my sanity. You upload your documents and it tells you exactly what to do with Form 8615 and kiddie tax situations. It showed me how to properly link my return with my son's and identified a mistake I was making that would have triggered an audit flag. The AI explained everything in plain English about how the kiddie tax works with investments - apparently the rules changed a few years ago and a lot of tax software hasn't caught up. You might want to check it out before finalizing anything.

OK I have to admit I was wrong about taxr.ai. I tried it after posting my skeptical comment and it actually solved my kiddie tax nightmare. My situation was complicated because my son had both dividend income and capital gains from selling some stocks his grandfather gifted him years ago. The system correctly identified that I needed to complete my return first, then showed exactly which lines from my return needed to go on his Form 8615. It even explained the different tax rates that apply to his earned income versus the unearned investment income. What really impressed me was how it caught that I was about to make a mistake by reporting his investment income on my Schedule B instead of on his return with Form 8615. Would have definitely caused problems if audited!

If you're getting stuck with the IRS's confusing Form 8615 instructions, you might want to call them directly. I know everyone says it's impossible to get through, but I used https://claimyr.com and got connected to an actual IRS agent in about 15 minutes instead of waiting for hours. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was completely confused about how to handle my daughter's investment income and needed clarification on whether I should list her as a dependent given her income level. The IRS agent walked me through the exact requirements for Form 8615 and confirmed I was completing it correctly. Saved me from potentially making an expensive mistake.

I need to publicly eat my words about Claimyr. After posting my skeptical comment, I was desperate enough to try it for my Form 8615 questions. I couldn't believe it when my phone rang about 20 minutes later and I was talking to an actual IRS representative! The agent confirmed I was filing Form 8615 correctly for my son who has both earned income from a part-time job and investment income from a UTMA account. She clarified that I needed to complete my own return first to get the correct taxable income amount for line 11 of the form. What would have taken me days of research and probably still getting wrong was solved in a 10-minute call. I've already filed both returns and my son's refund (including his withholding) was approved within 2 weeks. This service literally saved me from making a mistake that would have required amending both returns.

A tip that helped me with Form 8615: Make sure you're using the most current version of your tax software. I had major issues last year because I was using an older version of TurboTax that didn't correctly implement the latest kiddie tax rules. Also, double check if your state has its own version of the kiddie tax. Some states like California have their own rules about how dependents' investment income is taxed, and I ended up having to file a separate form for state taxes too.

Quick question - does anyone know if I should report my kid as "can be claimed as dependent" if I'm dealing with Form 8615? My daughter made about $5,000 last year from a summer job plus has some dividend income, but I'm not sure if checking that box affects how the kiddie tax is calculated.

Just want to mention that if your child only has unearned income (no job income), you might have the option to include it on YOUR tax return using Form 8814 instead of filing a separate return with Form 8615. That can sometimes be simpler. But since your daughter has both earned income from her job and investment income, she'll need to file her own return with Form 8615. Also, the threshold for filing Form 8615 in 2024 (for 2023 taxes) is $2,500 in unearned income, so with $1,800 you might actually be under the threshold and don't need Form 8615 at all. Double check the current year's threshold!