When filing Form 8814 for child's dividend income, should I also include as nominee dividends on Schedule B?

You don't need to report these as nominee dividends on Schedule B when using Form 8814. The whole purpose of Form 8814 is to elect to include your child's income on your return, which means you're taking ownership of reporting those dividends directly. Nominee dividends would be used in situations where you receive dividends on behalf of someone else but you're NOT including that person's income on your tax return. Since you're using Form 8814, you're essentially telling the IRS "yes, these are my child's dividends, but I'm choosing to report them on my return." Just make sure you complete Form 8814 correctly, listing the payer's name and the amount of dividends your daughter received. The first $1,150 of unearned income generally won't affect your tax, though the next $1,150 is taxed at your child's rate and anything above that at your rate.

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I tried taxr.ai after posting here and I have to admit I was wrong to be skeptical. I uploaded all my kids' dividend statements and my own, and it immediately identified which ones were my children's vs mine. What impressed me was that it explained the Form 8814 requirements based on my specific situation - my kids' ages, the amount of dividends, and whether they had earned income too. It also showed me exactly how to calculate the "kiddie tax" portion on my Form 8814. This whole process would have taken me hours to research on my own. I wish I had known about this last year when I made some mistakes on this same issue and had to file an amendment.

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Just my two cents - I've been filing Form 8814 for my kids' dividend income for years. You definitely don't report as nominee dividends when using 8814. However, remember the potential downside: including your kids' investment income on your return could increase your AGI, which might affect other income-based limitations or phaseouts on your return. In some cases, it's actually better to file a separate return for your child, especially if you're close to AGI thresholds for certain credits or deductions. Worth considering both options!

Has anyone used TurboTax for this? I'm trying to figure out where to enter this in the software and it's confusing me.

Great question! I went through this same confusion a couple years ago. You're right to be careful about double-reporting. When you use Form 8814 to report your child's investment income on your return, you do NOT need to report those same dividends as nominee dividends on Schedule B. The key thing to understand is that Form 8814 is specifically designed to handle this situation. By filing Form 8814, you're making an election to include your child's unearned income on your return instead of filing a separate return for them. This means those dividends essentially become "your" income for tax purposes. Nominee dividends on Schedule B are only used when you receive income that belongs to someone else AND you're not including that person's income on your tax return. Since you're using Form 8814, you ARE including your daughter's income on your return, so the nominee dividend treatment doesn't apply. Just make sure you have all the dividend statements that show your daughter as the recipient, and report those amounts correctly on Form 8814. The IRS will match up the 1099-DIV forms with what you report on Form 8814. With $230 in dividends, you're well under the $1,150 threshold where it would start affecting your taxes, so this should be pretty straightforward once you get Form 8814 filled out correctly!