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Freetaxusa com Index A Adjusted basis defined, Adjusted basis defined. Freetaxusa com Administrative or management activities, Administrative or management activities. Freetaxusa com Assistance (see Tax help) Attorneys, Place To Meet Patients, Clients, or Customers B Business expenses not for use of home, Business expenses not for use of your home. Freetaxusa com Business furniture and equipment, Business Furniture and Equipment Business percentage, Business Percentage Business use of the home requirements (see Qualifying for a deduction) C Carryover of expenses, Carryover of unallowed expenses. Freetaxusa com Casualty losses, Casualty losses. Freetaxusa com Child and Adult Care Food Program reimbursements, Meals. Freetaxusa com Computer Listed property, Listed Property D Daycare facilities, Daycare Facility, Standard meal and snack rates. Freetaxusa com (see also Family daycare providers) Eligible children for standard meal and snack rates, Standard meal and snack rates. Freetaxusa com Exceptions for regular use requirement, Daycare Facility Family daycare, Standard meal and snack rates. Freetaxusa com Family daycare provider, Standard meal and snack rates. Freetaxusa com Meals, Meals. Freetaxusa com , Standard meal and snack rates. Freetaxusa com Regular use, Daycare Facility Standard meal and snack rates, Meals. Freetaxusa com , Standard meal and snack rates. Freetaxusa com Deduction limit, Deduction Limit Deduction requirements Employee use, Additional tests for employee use. Freetaxusa com Exceptions to exclusive use, Exceptions to Exclusive Use Exclusive use, Exclusive Use More than one trade or business, More Than One Trade or Business Place to meet clients, Place To Meet Patients, Clients, or Customers Principal place of business, Principal Place of Business Regular use, Regular Use Separate structure, Separate Structure Storage of inventory or product samples, Storage of inventory or product samples. Freetaxusa com Trade or business use, Trade or Business Use Deductions Figuring, Figuring the Deduction, Part 2—Figure Your Allowable Deduction Limit, Deduction Limit Part-year use, Part-year use. Freetaxusa com Qualifying for, Qualifying for a Deduction, Separate Structure Rental to employer, Rental to employer. Freetaxusa com Unreimbursed partnership expenses, Deducting unreimbursed partnership expenses. Freetaxusa com Using Actual Expenses, Using Actual Expenses Dentists, Place To Meet Patients, Clients, or Customers Depreciation, Property Bought for Business Use 5-year property, Depreciation 7-year property, Depreciation Adjusted basis, Adjusted basis defined. Freetaxusa com Fair market value, Fair market value defined. Freetaxusa com Figuring depreciation for the current year, Figuring the depreciation deduction for the current year. Freetaxusa com Furniture and equipment, Business Furniture and Equipment, Depreciation Home, Depreciating Your Home Nonresidential real property, Figuring the depreciation deduction for the current year. Freetaxusa com Percentage table for 39-year nonresidential real property, Depreciation table. Freetaxusa com Permanent improvements, Permanent improvements. Freetaxusa com , Depreciating permanent improvements. Freetaxusa com Depreciation of home, Depreciating Your Home Basis adjustment, Basis Adjustment MACRS (Table 2), Depreciation table. Freetaxusa com Property bought for business use, Depreciation Sale or exchange of home, Depreciation Doctors, Place To Meet Patients, Clients, or Customers E Employee use of home, Additional tests for employee use. Freetaxusa com Employees Adequately accounting to employer, Adequately accounting to employer. Freetaxusa com Casualty losses, Casualty losses. Freetaxusa com Mortgage interest, Deductible mortgage interest. Freetaxusa com Other expenses, Other expenses. Freetaxusa com Real estate taxes, Real estate taxes. Freetaxusa com Exclusive use, Exclusive Use Expenses Casualty losses, Casualty losses. Freetaxusa com Direct, Actual Expenses Indirect, Actual Expenses Insurance, Insurance. Freetaxusa com Mortgage interest, Deductible mortgage interest. Freetaxusa com , Qualified mortgage insurance premiums. Freetaxusa com Real estate taxes, Real estate taxes. Freetaxusa com Related to tax-exempt income, Expenses related to tax-exempt income. Freetaxusa com Rent, Rent. Freetaxusa com Repairs, Repairs. Freetaxusa com Security system, Security system. Freetaxusa com Telephone, Telephone. Freetaxusa com Types of, Actual Expenses Unrelated, Actual Expenses Utilities and services, Utilities and services. Freetaxusa com Where to deduct, Where To Deduct F Fair market value, Fair market value defined. Freetaxusa com Family daycare providers Meal and snack log (Exhibit A), Standard meal and snack rates. Freetaxusa com Standard meal and snack rates, Standard meal and snack rates. Freetaxusa com Standard meal and snack rates (Table 3), Standard meal and snack rates. Freetaxusa com Figuring the deduction Business percentage, Business Percentage Deduction limit, Deduction Limit Form, Useful Items - You may want to see:, Self-Employed Persons, Real estate taxes. Freetaxusa com 1040, Schedule F, Casualty losses. Freetaxusa com 2106, Employees 4562, Reporting and recordkeeping requirements. Freetaxusa com 4684, Casualty losses. Freetaxusa com 8829, Actual Expenses, Casualty losses. Freetaxusa com , Business Percentage, Daycare Facility W-2 Reimbursed expenses, Employees Free tax services, Free help with your tax return. Freetaxusa com Furniture and equipment, Business Furniture and Equipment H Help (see Tax help) Home Business percentage, Business Percentage Depreciation, Depreciating Your Home Sale of, Sale or Exchange of Your Home Home expenses, Can you deduct business use of, Figure A, , Principal Place of Business I Improvements (see Permanent improvements) Insurance, Insurance. Freetaxusa com Inventory, storage of, Storage of inventory or product samples. Freetaxusa com L Listed property Computers, Listed Property Defined, Listed Property Employee requirements, Employee. Freetaxusa com Reporting and recordkeeping requirements, Reporting and recordkeeping requirements. Freetaxusa com Years following the year placed in service, Years following the year placed in service. Freetaxusa com M MACRS percentage table 39-year nonresidential real property, Depreciation table. Freetaxusa com Meals, Meals. Freetaxusa com Meeting with patients, clients, or customers on premises, Place To Meet Patients, Clients, or Customers More than one place of business, More than one place of business. Freetaxusa com More than one trade or business, More Than One Trade or Business More-than-50%-use test, More-than-50%-use test. Freetaxusa com Mortgage interest, Deductible mortgage interest. Freetaxusa com , Qualified mortgage insurance premiums. Freetaxusa com P Partners, Partners Partnership expenses, unreimbursed, Deducting unreimbursed partnership expenses. Freetaxusa com Permanent improvements, Permanent improvements. Freetaxusa com , Depreciating permanent improvements. Freetaxusa com Personal property converted to business use, Personal Property Converted to Business Use Place of business, more than one, More than one place of business. Freetaxusa com Principal place of business, Principal Place of Business Product samples, Storage of inventory or product samples. Freetaxusa com Property bought for business use Depreciation, Depreciation Section 179 deduction, Property Bought for Business Use, Section 179 Deduction Property converted to business use, Personal, Personal Property Converted to Business Use Publications, Useful Items - You may want to see: (see Tax help) Q Qualifying for a deduction, Qualifying for a Deduction R Real estate taxes, Real estate taxes. Freetaxusa com Recordkeeping, Recordkeeping Recordkeeping requirements Business furniture and equipment, Reporting and recordkeeping requirements. Freetaxusa com Family daycare provider meal and snack log (Exhibit A), Standard meal and snack rates. Freetaxusa com Regular use, Regular Use Reminders, Reminders Rent, Rent. Freetaxusa com Repairs, Repairs. Freetaxusa com Reporting requirements Business furniture and equipment, Reporting and recordkeeping requirements. Freetaxusa com S Sale or exchange of your home, Sale or Exchange of Your Home Basis adjustment, Basis Adjustment Depreciation taken, Depreciation Ownership and use tests, Ownership and use tests. Freetaxusa com Section 179, Section 179 Deduction Furniture and equipment, Business Furniture and Equipment, Listed Property Listed property, Business Furniture and Equipment, Listed Property Personal property converted to business use, Personal Property Converted to Business Use Property bought for business use, Property Bought for Business Use Security system, Security system. Freetaxusa com Self-employed persons Deduction of expenses, Self-Employed Persons Separate structure, Separate Structure Simplified Method Actual expenses and depreciation of your home, Actual expenses and depreciation of your home. Freetaxusa com Allowable area, Allowable area. Freetaxusa com Business expenses not related to use of the home, Business expenses not related to use of the home. Freetaxusa com Electing the simplified method, Electing the Simplified Method More than one home, More than one home. Freetaxusa com More than one qualified business use, More than one qualified business use. Freetaxusa com Shared use, Shared use. Freetaxusa com Expenses deductible without regard to business use, Expenses deductible without regard to business use. Freetaxusa com No carryover of unallowed expenses, No deduction of carryover of actual expenses. Freetaxusa com Simplified amount, Simplified Amount Space used regularly for daycare, Space used regularly for daycare. Freetaxusa com Using the simplified method, Using the Simplified Method Standard meal and snack rates, Standard meal and snack rates. Freetaxusa com Storage of inventory, Storage of inventory or product samples. Freetaxusa com T Tables and figures MACRS Depreciation of home (Table 2), Depreciation table. Freetaxusa com Qualifying for deduction (Figure A), Standard meal and snack rates (Table 3), Table 3. Freetaxusa com Standard Meal and Snack Rates1 Types of expenses (Table 1), Actual Expenses Tax help, How To Get Tax Help Telephone, Telephone. Freetaxusa com Trade or business use, Trade or Business Use TTY/TDD information, How To Get Tax Help Types of expenses, Actual Expenses U Utilities, Utilities and services. Freetaxusa com W Where to deduct expenses, Where To Deduct Employees, Employees Self-employed, Self-Employed Persons Worksheets Area Adjustment Worksheet (for simplified method), Area Adjustment Worksheet (for simplified method) Worksheets to figure the deduction for business use of your home (simplified method), Worksheets To Figure the Deduction for Business Use of Your Home (Simplified Method) Daycare facility worksheet (for simplified method), Daycare Facility Worksheet (for simplified method) Simplified method worksheet, Simplified Method Worksheet Prev  Up     Home   More Online Publications
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Extra Time Granted for Tax-Exempt Bond Issuers Affected by Severe Storms and Tornados in Oklahoma

Government entity issuers of tax-exempt bonds affected by the severe storms and tornados occurring in parts of Oklahoma may qualify for additional time to file certain returns related to tax-exempt bonds, qualified tax credit bonds, and specified tax credit bonds.

Following recent disaster declarations for individual assistance issued by the Federal Emergency Management Agency, affected government entities in covered disaster areas in Oklahoma will receive filing and payment relief. 

Affected issuers who are required to file a Form 8038 series information return or a Form 8038-T in connection with an arbitrage payment, with a due date between May 18, 2013 and Sept. 29, 2013, may file such returns and make such payments on or before Sept. 30, 2013.

Affected issuers may also file such returns and make such payments on or before Sept. 30, 2013, if the records necessary to make such filing or payment, the conduit borrower, the bond counsel, or other professional upon whom the issuer relies to make such filing or payment are located in a covered disaster area.

The IRS will abate any late-filing penalty that would otherwise apply. The IRS automatically provides this relief to affected issuers located in covered disaster areas. Issuers need not contact the IRS to get this relief.  However, affected issuers should clearly indicate on the top of the return that such late filing or payment is the result of devastation caused by the severe storms and tornados in Oklahoma.

In addition, an affected issuer required to file a Form 8038 series information return or a Form 8038-T in connection with an arbitrage payment, due between May 18, 2013 and Sept. 29, 2013, may request authority to file a Form 8038 or Form 8038-T after Sept. 30, 2013, by requesting an extension under Revenue Procedures 2002-48 and 2005-40, which provide guidance on how issuers may request extensions of time to file Form 8038 series information returns and waivers of penalty associated with a late arbitrage payment.  Affected issuers should request relief in accordance with these revenue procedures and clearly indicate that such late filing or payment was the result of devastation caused by the severe storms and tornados in Oklahoma.

In addition, a Form 8038-CP authorized to be filed by an affected issuer between May 18, 2013 and Sept. 29, 2013, but filed thereafter, will be immediately processed upon receipt.

At this time, IRS relief for affected issuers applies to the following covered disaster areas in Oklahoma: Cleveland, Lincoln, McClain, Oklahoma and Pottawatomie counties.

Related Items:

IRS Gives Tax Relief to Oklahoma Tornado Victims; Return Filing and Tax Payment Deadlines Extended to Sept 30

Tax Relief for Victims of Severe Storms and Tornadoes in Oklahoma

Revenue Procedure 2007-56

Page Last Reviewed or Updated: 04-Sep-2013

The Freetaxusa Com

Freetaxusa com Publication 929 - Main Content Table of Contents Part 1. Freetaxusa com Rules for All Dependents Filing RequirementsEarned Income Only Unearned Income Only Both Earned and Unearned Income Other Filing Requirements Should a Return Be Filed Even If Not Required? Responsibility for Child's ReturnThird party designee. Freetaxusa com Designated as representative. Freetaxusa com IRS notice. Freetaxusa com Standard DeductionStandard Deduction of Zero Dependent's Own Exemption Withholding From WagesExceptions. Freetaxusa com Part 2. Freetaxusa com Tax on Unearned Income of Certain ChildrenWhich Parent's Return To Use Parent's Election To Report Child's Interest and DividendsEffect of Making the Election Figuring Child's Income Figuring Additional Tax Tax for Certain Children Who Have Unearned IncomeProviding Parental Information (Form 8615, Lines A–C) Step 1. Freetaxusa com Figuring the Child's Net Unearned Income (Form 8615, Part I) Step 2. Freetaxusa com Figuring a Tentative Tax at the Parent's Tax Rate (Form 8615, Part II) Step 3. Freetaxusa com Figuring the Child's Tax (Form 8615, Part III) Alternative Minimum Tax Illustrated Example Part 1. Freetaxusa com Rules for All Dependents This part of the publication discusses the filing requirements for dependents, who is responsible for a child's return, how to figure a dependent's standard deduction and exemption (if any), and whether a dependent can claim exemption from federal income tax withholding. Freetaxusa com Filing Requirements Whether a dependent has to file a return generally depends on the amount of the dependent's earned and unearned income and whether the dependent is married, is age 65 or older, or is blind. Freetaxusa com A dependent may have to file a return even if his or her income is less than the amount that would normally require a return. Freetaxusa com See Other Filing Requirements, later. Freetaxusa com The following sections apply to dependents with: Earned income only, Unearned income only, and Both earned and unearned income. Freetaxusa com  To find out whether a dependent must file, read the section that applies, or use Table 1. Freetaxusa com Earned Income Only A dependent whose gross income is only earned income must file a return if the gross income is more than the amount listed in the following table. Freetaxusa com Marital Status Amount Single   Under 65 and not blind $6,100 Either 65 or older or blind $7,600 65 or older and blind $9,100 Married*   Under 65 and not blind $6,100 Either 65 or older or blind $7,300 65 or older and blind $8,500 *If a dependent's spouse itemizes deductions on a separate return, the dependent must file a return if the dependent has $5 or more of gross income (earned and/or unearned). Freetaxusa com Example. Freetaxusa com William is 16. Freetaxusa com His mother claims an exemption for him on her income tax return. Freetaxusa com He worked part time on weekends during the school year and full time during the summer. Freetaxusa com He earned $7,000 in wages. Freetaxusa com He did not have any unearned income. Freetaxusa com He must file a tax return because he has earned income only and his gross income is more than $6,100. Freetaxusa com If he is blind, he does not have to file a return because his gross income is not more than $7,600. Freetaxusa com Unearned Income Only A dependent whose gross income is only unearned income must file a return if the gross income is more than the amount listed in the following table. Freetaxusa com Marital Status Amount Single   Under 65 and not blind $1,000 Either 65 or older or blind $2,500 65 or older and blind $4,000 Married*   Under 65 and not blind $1,000 Either 65 or older or blind $2,200 65 or older and blind $3,400 *If a dependent's spouse itemizes deductions on a separate return, the dependent must file a return if the dependent has $5 or more of gross income (earned and/or unearned). Freetaxusa com Example. Freetaxusa com Sarah is 18 and single. Freetaxusa com Her parents can claim an exemption for her on their income tax return. Freetaxusa com She received $1,970 of taxable interest and dividend income. Freetaxusa com She did not work during the year. Freetaxusa com She must file a tax return because she has unearned income only and her gross income is more than $1,000. Freetaxusa com If she is blind, she does not have to file a return because she has unearned income only and her gross income is not more than $2,500. Freetaxusa com Election to report child's unearned income on parent's return. Freetaxusa com   A parent of a child under age 19 (or under age 24 if a full-time student) may be able to elect to include the child's interest and dividend income on the parent's return. Freetaxusa com See Parent's Election To Report Child's Interest and Dividends in Part 2. Freetaxusa com If the parent makes this election, the child does not have to file a return. Freetaxusa com Both Earned and Unearned Income A dependent who has both earned and unearned income generally must file a return if the dependent's gross income is more than line 5 of the following worksheet. Freetaxusa com Filing Requirement Worksheet for Most Dependents 1. Freetaxusa com Enter dependent's earned income plus $350     2. Freetaxusa com Minimum amount   $1,000 3. Freetaxusa com Compare lines 1 and 2. Freetaxusa com Enter the larger amount     4. Freetaxusa com Maximum amount   6,100 5. Freetaxusa com Compare lines 3 and 4. Freetaxusa com Enter the smaller amount     6. Freetaxusa com Enter the dependent's gross income. Freetaxusa com If line 6 is more than line 5, the dependent must file an income tax return. Freetaxusa com If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 6 is $5 or more. Freetaxusa com       Table 1. Freetaxusa com 2013 Filing Requirements for Dependents If your parent (or someone else) can claim you as a dependent, use this table to see if you must file a return. Freetaxusa com   See the definitions of “dependent,”“earned income,”“unearned income,” and “gross income” in the Glossary. Freetaxusa com   Single dependents—Were you either age 65 or older or blind?     No. Freetaxusa com You must file a return if any of the following apply. Freetaxusa com       Your unearned income was over $1,000. Freetaxusa com Your earned income was over $6,100. Freetaxusa com Your gross income was more than the larger of—       $1,000, or Your earned income (up to $5,750) plus $350. Freetaxusa com         Yes. Freetaxusa com You must file a return if any of the following apply. Freetaxusa com     Your unearned income was over $2,500 ($4,000 if 65 or older and blind), Your earned income was over $7,600 ($9,100 if 65 or older and blind), Your gross income was more than the larger of—       $2,500 ($4,000 if 65 or older and blind), or Your earned income (up to $5,750) plus $1,850 ($3,350 if 65 or older and blind). Freetaxusa com       Married dependents—Were you either age 65 or older or blind?     No. Freetaxusa com You must file a return if any of the following apply. Freetaxusa com       Your gross income was at least $5 and your spouse files a separate return and itemizes deductions. Freetaxusa com Your unearned income was over $1,000. Freetaxusa com Your earned income was over $6,100. Freetaxusa com Your gross income was more than the larger of—       $1,000, or Your earned income (up to $5,750) plus $350. Freetaxusa com       Yes. Freetaxusa com You must file a return if any of the following apply. Freetaxusa com       Your gross income was at least $5 and your spouse files a separate return and itemizes deductions. Freetaxusa com Your unearned income was over $2,200 ($3,400 if 65 or older and blind), Your earned income was over $7,300 ($8,500 if 65 or older and blind), Your gross income was more than the larger of—       $2,200 ($3,400 if 65 or older and blind), or Your earned income (up to $5,750) plus $1,550 ($2,750 if 65 or older and blind). Freetaxusa com       Example 1. Freetaxusa com Joe is 20, single, not blind, and a full-time college student. Freetaxusa com He does not provide more than half of his own support, and his parents claim an exemption for him on their income tax return. Freetaxusa com He received $200 taxable interest income and earned $2,750 from a part-time job. Freetaxusa com He does not have to file a tax return because his gross income of $2,950 ($200 interest plus $2,750 in wages) is not more than $3,100, the amount on line 5 of his filled-in Filing Requirement Worksheet for Most Dependents (shown next). Freetaxusa com Filled-in Example 1 Filing Requirement Worksheet  for Most Dependents 1. Freetaxusa com Enter dependent's earned income plus $350   $ 3,100 2. Freetaxusa com Minimum amount   1,000 3. Freetaxusa com Compare lines 1 and 2. Freetaxusa com Enter the larger amount   3,100 4. Freetaxusa com Maximum amount   6,100 5. Freetaxusa com Compare lines 3 and 4. Freetaxusa com Enter the smaller amount   3,100 6. Freetaxusa com Enter the dependent's gross income. Freetaxusa com If line 6 is more than line 5, the dependent must file an income tax return. Freetaxusa com If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 6 is $5 or more. Freetaxusa com   $ 2,950   Example 2. Freetaxusa com The facts are the same as in Example 1 except that Joe had $600 taxable interest income. Freetaxusa com He must file a tax return because his gross income of $3,350 ($600 interest plus $2,750 wages) is more than $3,100, the amount on line 5 of his filled-in worksheet (shown next). Freetaxusa com Filled-in Example 2 Filing Requirement Worksheet for Most Dependents 1. Freetaxusa com Enter dependent's earned income plus $350   $ 3,100 2. Freetaxusa com Minimum amount   1,000 3. Freetaxusa com Compare lines 1 and 2. Freetaxusa com Enter the larger amount   3,100 4. Freetaxusa com Maximum amount   6,100 5. Freetaxusa com Compare lines 3 and 4. Freetaxusa com Enter the smaller amount   3,100 6. Freetaxusa com Enter the dependent's gross income. Freetaxusa com If line 6 is more than line 5, the dependent must file an income tax return. Freetaxusa com If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 6 is $5 or more. Freetaxusa com   $ 3,350   Age 65 or older or blind. Freetaxusa com A dependent who is age 65 or older or blind must file a return if his or her gross income is more than line 7 of the following worksheet. Freetaxusa com Filing Requirement Worksheet  for Dependents Who Are Age 65 or Older or Blind 1. Freetaxusa com Enter dependent's earned income plus $350     2. Freetaxusa com Minimum amount   $1,000 3. Freetaxusa com Compare lines 1 and 2. Freetaxusa com Enter the larger amount     4. Freetaxusa com Maximum amount   6,100 5. Freetaxusa com Compare lines 3 and 4. Freetaxusa com Enter the smaller amount     6. Freetaxusa com Enter the amount from the following table that applies to the dependent       Marital Status Amount     Single         Either 65 or older or blind $1,500       65 or older and blind $3,000     Married         Either 65 or older or blind $1,200       65 or older and blind $2,400   7. Freetaxusa com Add lines 5 and 6. Freetaxusa com Enter the total     8. Freetaxusa com Enter the dependent's gross income. Freetaxusa com If line 8 is more than line 7, the dependent must file an income tax return. Freetaxusa com If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 8 is $5 or more     Example 3. Freetaxusa com The facts are the same as in Example 2 except that Joe is also blind. Freetaxusa com He does not have to file a return because his gross income of $3,350 is not more than $4,600, the amount on line 7 of his filled-in Filing Requirement Worksheet for Dependents Who Are Age 65 or Older or Blind (shown next). Freetaxusa com   Filled-in Example 3 Filing Requirement Worksheet  for Dependents Who Are Age 65 or Older or Blind 1. Freetaxusa com Enter dependent's earned income plus $350   $3,100 2. Freetaxusa com Minimum amount   1,000 3. Freetaxusa com Compare lines 1 and 2. Freetaxusa com Enter the larger amount   3,100 4. Freetaxusa com Maximum amount   6,100 5. Freetaxusa com Compare lines 3 and 4. Freetaxusa com Enter the smaller amount   3,100 6. Freetaxusa com Enter the amount from the following table that applies to the dependent   1,500   Marital Status Amount     Single         Either 65 or older or blind $1,500       65 or older and blind $3,000     Married         Either 65 or older or blind $1,200       65 or older and blind $2,400   7. Freetaxusa com Add lines 5 and 6. Freetaxusa com Enter the total   4,600 8. Freetaxusa com Enter the dependent's gross income. Freetaxusa com If line 8 is more than line 7, the dependent must file an income tax return. Freetaxusa com If the dependent is married and his or her spouse itemizes deductions on a separate return, the dependent must file an income tax return if line 8 is $5 or more   $3,350 Other Filing Requirements Some dependents may have to file a tax return even if their income is less than the amount that would normally require them to file a return. Freetaxusa com A dependent must file a tax return if he or she owes any other taxes, such as: Social security and Medicare taxes on tips not reported to his or her employer or on wages received from an employer who did not withhold these taxes, Uncollected social security and Medicare or railroad retirement taxes on tips reported to his or her employer or on group-term life insurance, Alternative minimum tax, Additional tax on a health savings account from Form 8889, Part III, Recapture taxes, such as the tax from recapture of an education credit, or Additional tax on a qualified plan, including an individual retirement arrangement (IRA), or other tax-favored account. Freetaxusa com But if the dependent is filing a return only because of this tax, the dependent can file Form 5329 by itself. Freetaxusa com A dependent must also file a tax return if he or she: Had wages of $108. Freetaxusa com 28 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes, or Had net earnings from self-employment of at least $400. Freetaxusa com Spouse itemizes. Freetaxusa com   A dependent must file a return if the dependent's spouse itemizes deductions on a separate return and the dependent has $5 or more of gross income (earned and/or unearned). Freetaxusa com Should a Return Be Filed Even If Not Required? Even if a dependent does not meet any of the filing requirements discussed earlier, he or she should file a tax return if either of the following applies. Freetaxusa com Income tax was withheld from his or her income. Freetaxusa com He or she qualifies for the earned income credit, additional child tax credit, health coverage tax credit, or refundable American opportunity education credit. Freetaxusa com See the tax return instructions to find out who qualifies for these credits. Freetaxusa com  By filing a return, the dependent can get a refund. Freetaxusa com Responsibility for Child's Return Generally, a child is responsible for filing his or her own tax return and for paying any tax, penalties, or interest on that return. Freetaxusa com If a child cannot file his or her own return for any reason, such as age, the child's parent, guardian, or other legally responsible person must file it for the child. Freetaxusa com Signing the child's return. Freetaxusa com   If the child cannot sign his or her return, a parent or guardian must sign the child's name followed by the words “By (signature), parent (or guardian) for minor child. Freetaxusa com ” Authority of parent or guardian. Freetaxusa com   A parent or guardian who signs a return on a child's behalf can deal with the IRS on all matters connected with the return. Freetaxusa com   In general, a parent or guardian who does not sign the child's return can only provide information concerning the child's return and pay the child's tax. Freetaxusa com That parent or guardian is not entitled to receive information from the IRS or legally bind the child to a tax liability arising from the return. Freetaxusa com Third party designee. Freetaxusa com   A child's parent or guardian who does not sign the child's return may be authorized, as a third party designee, to discuss the processing of the return with the IRS as well as provide information concerning the return. Freetaxusa com The child or the person signing the return on the child's behalf must check the “Yes” box in the “Third Party Designee” area of the return and name the parent or guardian as the designee. Freetaxusa com   If designated, a parent or guardian can respond to certain IRS notices and receive information about the processing of the return and the status of a refund or payment. Freetaxusa com This designation does not authorize the parent or guardian to receive any refund check, bind the child to any tax liability, or otherwise represent the child before the IRS. Freetaxusa com See the return instructions for more information. Freetaxusa com Designated as representative. Freetaxusa com   A parent or guardian who does not sign the child's return may be designated as the child's representative by the child or the person signing the return on the child's behalf. Freetaxusa com Form 2848, Power of Attorney and Declaration of Representative, is used to designate a child's representative. Freetaxusa com See Publication 947, Practice Before the IRS and Power of Attorney, for more information. Freetaxusa com   If designated, a parent or guardian can receive information about the child's return but cannot legally bind the child to a tax liability unless authorized to do so by the law of the state in which the child lives. Freetaxusa com IRS notice. Freetaxusa com   If you or the child receives a notice from the IRS concerning the child's return or tax liability, you should immediately inform the IRS that the notice concerns a child. Freetaxusa com The notice will show who to contact. Freetaxusa com The IRS will try to resolve the matter with the parent(s) or guardian(s) of the child consistent with their authority. Freetaxusa com Child's earnings. Freetaxusa com   For federal income tax purposes, amounts a child earns by performing services are included in the gross income of the child and not the gross income of the parent. Freetaxusa com This is true even if, under state law, the parent has the right to the earnings and may actually have received them. Freetaxusa com If the child does not pay the tax due on this income, the parent may be liable for the tax. Freetaxusa com Child's expenses. Freetaxusa com   Deductions for payments that are made out of a child's earnings are the child's, even if the payments are made by the parent. Freetaxusa com Example. Freetaxusa com You made payments on your child's behalf that are deductible as a business expense and a charitable contribution. Freetaxusa com You made the payments out of your child's earnings. Freetaxusa com These items can be deducted only on the child's return. Freetaxusa com Standard Deduction The standard deduction for an individual who can be claimed as a dependent on another person's tax return is generally limited to the larger of: $1,000, or The individual's earned income plus $350, but not more than the regular standard deduction (generally $6,100). Freetaxusa com However, the standard deduction may be higher for a dependent who: Is 65 or older, or Is blind. Freetaxusa com Certain dependents cannot claim any standard deduction. Freetaxusa com See Standard Deduction of Zero , later. Freetaxusa com Worksheet 1. Freetaxusa com   Use Worksheet 1 to figure the dependent's standard deduction. Freetaxusa com Worksheet 1. Freetaxusa com Standard Deduction Worksheet for Dependents Use this worksheet only if someone else can claim you (or your spouse, if filing jointly) as a dependent. Freetaxusa com If you were 65 or older and/or blind, check the correct number of boxes below. Freetaxusa com Put the total number of boxes checked in box c and go to line 1. Freetaxusa com a. Freetaxusa com You 65 or older   Blind   b. Freetaxusa com Your spouse, if claiming  spouse's exemption 65 or older   Blind   c. Freetaxusa com Total boxes checked         1. Freetaxusa com Enter your earned income (defined below) plus $350. Freetaxusa com If none, enter -0-. Freetaxusa com 1. Freetaxusa com     2. Freetaxusa com Minimum amount. Freetaxusa com   2. Freetaxusa com $1,000   3. Freetaxusa com Compare lines 1 and 2. Freetaxusa com Enter the larger of the two amounts here. Freetaxusa com 3. Freetaxusa com     4. Freetaxusa com Enter on line 4 the amount shown below for your filing status. Freetaxusa com       Single or Married filing separately—$6,100 Married filing jointly—$12,200 Head of household—$8,950 4. Freetaxusa com     5. Freetaxusa com Standard deduction. Freetaxusa com         a. Freetaxusa com Compare lines 3 and 4. Freetaxusa com Enter the smaller amount here. Freetaxusa com If under 65 and not blind, stop here. Freetaxusa com This is your standard deduction. Freetaxusa com Otherwise, go on to line 5b. Freetaxusa com 5a. Freetaxusa com     b. Freetaxusa com If 65 or older or blind, multiply $1,500 ($1,200 if married) by the number in box c above. Freetaxusa com Enter the result here. Freetaxusa com 5b. Freetaxusa com     c. Freetaxusa com Add lines 5a and 5b. Freetaxusa com This is your standard deduction for 2013. Freetaxusa com 5c. Freetaxusa com     Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. Freetaxusa com It also includes any amount received as a scholarship that you must include in income. Freetaxusa com   Example 1. Freetaxusa com Michael is single, age 15, and not blind. Freetaxusa com His parents can claim him as a dependent on their tax return. Freetaxusa com He has taxable interest income of $800 and wages of $150. Freetaxusa com He enters $500 (his earned income plus $350) on line 1 of Worksheet 1. Freetaxusa com On line 3, he enters $1,000, the larger of $500 or $1,000. Freetaxusa com Michael enters $6,100 on line 4. Freetaxusa com On line 5a, he enters $1,000, the smaller of $1,000 or $6,100. Freetaxusa com His standard deduction is $1,000. Freetaxusa com Example 2. Freetaxusa com Judy, a full-time student, is single, age 22, and not blind. Freetaxusa com Her parents can claim her as a dependent on their tax return. Freetaxusa com She has dividend income of $275 and wages of $2,500. Freetaxusa com She enters $2,850 (her earned income plus $350) on line 1 of Worksheet 1. Freetaxusa com On line 3, she enters $2,850, the larger of $2,850 or $1,000. Freetaxusa com She enters $6,100 on line 4. Freetaxusa com On line 5a, she enters $2,850 (the smaller of $2,850 or $6,100) as her standard deduction. Freetaxusa com Example 3. Freetaxusa com Amy, who is single, is claimed as a dependent on her parents' tax return. Freetaxusa com She is 18 years old and blind. Freetaxusa com She has taxable interest income of $1,000 and wages of $2,000. Freetaxusa com She enters $2,350 (her earned income plus $350) on line 1 of Worksheet 1. Freetaxusa com She enters $2,350 (the larger of $2,350 or $1,000) on line 3, $6,100 on line 4, and $2,350 (the smaller of $2,350 or $6,100) on line 5a. Freetaxusa com Because Amy is blind, she checks the box for blindness and enters “1” in box c at the top of Worksheet 1. Freetaxusa com She enters $1,500 (the number in box c times $1,500) on line 5b. Freetaxusa com Her standard deduction on line 5c is $3,850 ($2,350 + $1,500). Freetaxusa com Standard Deduction of Zero The standard deduction for the following dependents is zero. Freetaxusa com A married dependent filing a separate return whose spouse itemizes deductions. Freetaxusa com A dependent who files a return for a period of less than 12 months due to a change in his or her annual accounting period. Freetaxusa com A nonresident or dual-status alien dependent, unless the dependent is married to a U. Freetaxusa com S. Freetaxusa com citizen or resident alien at the end of the year and chooses to be treated as a U. Freetaxusa com S. Freetaxusa com resident for the year. Freetaxusa com See Publication 519, U. Freetaxusa com S. Freetaxusa com Tax Guide for Aliens, for information on making this choice. Freetaxusa com Example. Freetaxusa com Jennifer, who is a dependent of her parents, is entitled to file a joint return with her husband. Freetaxusa com However, her husband elects to file a separate return and itemize his deductions. Freetaxusa com Because he itemizes, Jennifer's standard deduction on her return is zero. Freetaxusa com She can, however, itemize any of her allowable deductions. Freetaxusa com Dependent's Own Exemption A person who can be claimed as a dependent on another taxpayer's return cannot claim his or her own exemption. Freetaxusa com This is true even if the other taxpayer does not actually claim the exemption. Freetaxusa com Example. Freetaxusa com James and Barbara can claim their child, Ben, as a dependent on their return. Freetaxusa com Ben is a college student who works during the summer and must file a tax return. Freetaxusa com Ben cannot claim his own exemption on his return. Freetaxusa com This is true even if James and Barbara do not claim him as a dependent on their return. Freetaxusa com Withholding From Wages Employers generally withhold federal income tax, social security tax, and Medicare tax from an employee's wages. Freetaxusa com If the employee claims exemption from withholding on Form W-4, the employer will not withhold federal income tax. Freetaxusa com The exemption from withholding does not apply to social security and Medicare taxes. Freetaxusa com Conditions for exemption from withholding. Freetaxusa com   An employee can claim exemption from withholding for 2014 only if he or she meets both of the following conditions. Freetaxusa com For 2013, the employee had a right to a refund of all federal income tax withheld because he or she had no tax liability. Freetaxusa com For 2014, the employee expects a refund of all federal income tax withheld because he or she expects to have no tax liability. Freetaxusa com Dependents. Freetaxusa com   An employee who is a dependent ordinarily cannot claim exemption from withholding if both of the following are true. Freetaxusa com The employee's gross income will be more than $1,000, the minimum standard deduction for 2014. Freetaxusa com The employee's unearned income will be more than $350. Freetaxusa com Exceptions. Freetaxusa com   An employee may be able to claim exemption from withholding even if the employee is a dependent, if the employee: Is age 65 or older, Is blind, or Will claim on his or her 2014 tax return: Adjustments to income, Tax credits, or Itemized deductions. Freetaxusa com The above exceptions do not apply to supplemental wages greater than $1,000,000. Freetaxusa com For more information, see Exemption From Withholding in chapter 1 of Publication 505. Freetaxusa com Example. Freetaxusa com Guy is 17 and a student. Freetaxusa com During the summer he works part time at a grocery store. Freetaxusa com He expects to earn about $1,200 this year. Freetaxusa com He also worked at the store last summer and received a refund of all his withheld income tax because he did not have a tax liability. Freetaxusa com The only other income he expects during the year is $375 interest on a savings account. Freetaxusa com He expects that his parents will be able to claim him as a dependent on their tax return. Freetaxusa com He is not blind and will not claim adjustments to income, itemized deductions, a higher standard deduction, or tax credits on his return. Freetaxusa com Guy cannot claim exemption from withholding when he fills out Form W-4 because his parents will be able to claim him as a dependent, his gross income will be more than $1,000 (the minimum standard deduction amount) and his unearned income will be more than $350. Freetaxusa com Claiming exemption from withholding. Freetaxusa com    To claim exemption from withholding, an employee must enter “Exempt” in the space provided on Form W-4, line 7. Freetaxusa com The employee must complete the rest of the form, as explained in the form instructions, and give it to his or her employer. Freetaxusa com Renewing an exemption from withholding. Freetaxusa com   An exemption from withholding is good for only one year. Freetaxusa com An employee must file a new Form W-4 by February 15 each year to continue the exemption. Freetaxusa com Part 2. Freetaxusa com Tax on Unearned Income of Certain Children The two rules that follow may affect the tax on the unearned income of certain children. Freetaxusa com If the child's interest and dividend income (including capital gain distributions) total less than $10,000, the child's parent may be able to choose to include that income on the parent's return rather than file a return for the child. Freetaxusa com (See Parent's Election To Report Child's Interest and Dividends , later. Freetaxusa com ) If the child's interest, dividends, and other unearned income total more than $2,000, part of that income may be taxed at the parent's tax rate instead of the child's tax rate. Freetaxusa com (See Tax for Certain Children Who Have Unearned Income , later. Freetaxusa com ) For these rules, the term “child” includes a legally adopted child and a stepchild. Freetaxusa com These rules apply whether or not the child is a dependent. Freetaxusa com These rules do not apply if neither of the child's parents were living at the end of the year. Freetaxusa com Which Parent's Return To Use If a child's parents are married to each other and file a joint return, use the joint return to figure the tax on the child's unearned income. Freetaxusa com The tax rate and other return information from that return are used to figure the child's tax as explained later under Tax for Certain Children Who Have Unearned Income . Freetaxusa com Parents Who Do Not File a Joint Return For parents who do not file a joint return, the following discussions explain which parent's tax return must be used to figure the tax. Freetaxusa com Only the parent whose tax return is used can make the election described under Parent's Election To Report Child's Interest and Dividends . Freetaxusa com Parents are married. Freetaxusa com   If the child's parents file separate returns, use the return of the parent with the greater taxable income. Freetaxusa com Parents not living together. Freetaxusa com   If the child's parents are married to each other but not living together, and the parent with whom the child lives (the custodial parent) is considered unmarried, use the return of the custodial parent. Freetaxusa com If the custodial parent is not considered unmarried, use the return of the parent with the greater taxable income. Freetaxusa com   For an explanation of when a married person living apart from his or her spouse is considered unmarried, see Head of Household in Publication 501. Freetaxusa com Parents are divorced. Freetaxusa com   If the child's parents are divorced or legally separated, and the parent who had custody of the child for the greater part of the year (the custodial parent) has not remarried, use the return of the custodial parent. Freetaxusa com Custodial parent remarried. Freetaxusa com   If the custodial parent has remarried, the stepparent (rather than the noncustodial parent) is treated as the child's other parent. Freetaxusa com Therefore, if the custodial parent and the stepparent file a joint return, use that joint return. Freetaxusa com Do not use the return of the noncustodial parent. Freetaxusa com   If the custodial parent and the stepparent are married, but file separate returns, use the return of the one with the greater taxable income. Freetaxusa com If the custodial parent and the stepparent are married but not living together, the earlier discussion under Parents not living together applies. Freetaxusa com Parents never married. Freetaxusa com   If a child's parents have never been married to each other, but lived together all year, use the return of the parent with the greater taxable income. Freetaxusa com If the parents did not live together all year, the rules explained earlier under Parents are divorced apply. Freetaxusa com Widowed parent remarried. Freetaxusa com   If a widow or widower remarries, the new spouse is treated as the child's other parent. Freetaxusa com The rules explained earlier under Custodial parent remarried apply. Freetaxusa com Parent's Election To Report Child's Interest and Dividends You may be able to elect to include your child's interest and dividend income (including capital gain distributions) on your tax return. Freetaxusa com If you do, your child will not have to file a return. Freetaxusa com You can make this election only if all the following conditions are met. Freetaxusa com Your child was under age 19 (or under age 24 if a full-time student) at the end of the year. Freetaxusa com Your child had income only from interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends). Freetaxusa com The child's gross income was less than $10,000. Freetaxusa com The child is required to file a return unless you make this election. Freetaxusa com The child does not file a joint return for the year. Freetaxusa com No estimated tax payment was made for the year, and no overpayment from the previous year (or from any amended return) was applied to this year under your child's name and social security number. Freetaxusa com No federal income tax was withheld from your child's income under the backup withholding rules. Freetaxusa com You are the parent whose return must be used when applying the special tax rules for children. Freetaxusa com (See Which Parent's Return To Use , earlier. Freetaxusa com ) These conditions are also shown in Figure 1. Freetaxusa com Certain January 1 birthdays. Freetaxusa com   A child born on January 1, 1995, is considered to be age 19 at the end of 2013. Freetaxusa com You cannot make this election for such a child unless the child was a full-time student. Freetaxusa com   A child born on January 1, 1990, is considered to be age 24 at the end of 2013. Freetaxusa com You cannot make this election for such a child. Freetaxusa com How to make the election. Freetaxusa com    Make the election by attaching Form 8814 to your Form 1040 or Form 1040NR. Freetaxusa com (If you make this election, you cannot file Form 1040A or Form 1040EZ. Freetaxusa com ) Attach a separate Form 8814 for each child for whom you make the election. Freetaxusa com You can make the election for one or more children and not for others. Freetaxusa com Effect of Making the Election The federal income tax on your child's income may be more if you make the Form 8814 election. Freetaxusa com Rate may be higher. Freetaxusa com   If your child received qualified dividends or capital gain distributions, you may pay up to $100 more tax if you make this election instead of filing a separate tax return for the child. Freetaxusa com This is because the tax rate on the child's income between $1,000 and $2,000 is 10% if you make this election. Freetaxusa com However, if you file a separate return for the child, the tax rate may be as low as 0% (zero percent) because of the preferential tax rates for qualified dividends and capital gain distributions. Freetaxusa com Deductions you cannot take. Freetaxusa com   By making the Form 8814 election, you cannot take any of the following deductions that the child would be entitled to on his or her return. Freetaxusa com The additional standard deduction if the child is blind. Freetaxusa com The deduction for a penalty on an early withdrawal of your child's savings. Freetaxusa com Itemized deductions (such as your child's investment expenses or charitable contributions). Freetaxusa com Figure 1. Freetaxusa com Can You Include Your Child's Income On Your Tax Return? Please click here for the text description of the image. Freetaxusa com Figure 1. Freetaxusa com Can You Include Your Child's Income On Your Tax Return? Deductible investment interest. Freetaxusa com   If you use Form 8814, your child's unearned income is considered your unearned income. Freetaxusa com To figure the limit on your deductible investment interest, add the child's unearned income to yours. Freetaxusa com However, if your child received qualified dividends, capital gain distributions, or Alaska Permanent Fund dividends, see chapter 3 of Publication 550 for information about how to figure the limit. Freetaxusa com Alternative minimum tax. Freetaxusa com    If your child received tax-exempt interest (or exempt-interest dividends paid by a regulated investment company) from certain private activity bonds, you must determine if that interest is a tax preference item for alternative minimum tax (AMT) purposes. Freetaxusa com If it is, you must include it with your own tax preference items when figuring your AMT. Freetaxusa com See Form 6251, Alternative Minimum Tax—Individuals, and its instructions for details. Freetaxusa com Reduced deductions or credits. Freetaxusa com   If you use Form 8814, your increased adjusted gross income may reduce certain deductions or credits on your return, including the following. Freetaxusa com Deduction for contributions to a traditional individual retirement arrangement (IRA). Freetaxusa com Deduction for student loan interest. Freetaxusa com Itemized deductions for medical expenses, casualty and theft losses, and certain miscellaneous expenses. Freetaxusa com Credit for child and dependent care expenses. Freetaxusa com Child tax credit. Freetaxusa com Education tax credits. Freetaxusa com Earned income credit. Freetaxusa com Penalty for underpayment of estimated tax. Freetaxusa com   If you make this election for 2013 and did not have enough tax withheld or pay enough estimated tax to cover the tax you owe, you may be subject to a penalty. Freetaxusa com If you plan to make this election for 2014, you may need to increase your federal income tax withholding or your estimated tax payments to avoid the penalty. Freetaxusa com Get Publication 505 for more information. Freetaxusa com Figuring Child's Income Use Form 8814, Part I, to figure your child's interest and dividend income to report on your return. Freetaxusa com Only the amount over $2,000 is added to your income. Freetaxusa com The amount over $2,000 is shown on Form 8814, line 6. Freetaxusa com Unless the child's income includes qualified dividends or capital gain distributions (discussed next), the same amount is shown on Form 8814, line 12. Freetaxusa com Include the amount from Form 8814, line 12, on Form 1040 or Form 1040NR, line 21. Freetaxusa com If you file more than one Form 8814, include the total amounts from line 12 of all your Forms 8814 on Form 1040 or Form 1040NR, line 21. Freetaxusa com On the dotted line next to line 21, enter “Form 8814” and the total of the Form 8814, line 12 amounts. Freetaxusa com Note. Freetaxusa com The tax on the first $2,000 is figured on Form 8814, Part II. Freetaxusa com See Figuring Additional Tax , later. Freetaxusa com Qualified dividends. Freetaxusa com   Enter on Form 8814, line 2a, any ordinary dividends your child received. Freetaxusa com This amount may include qualified dividends. Freetaxusa com Qualified dividends are those dividends reported on Form 1040, line 9b, or Form 1040NR, line 10b, and are eligible for lower tax rates that apply to a net capital gain. Freetaxusa com For detailed information about qualified dividends, see Publication 550. Freetaxusa com   If your child received qualified dividends, the amount of these dividends that is added to your income must be reported on Form 1040, lines 9a and 9b, or Form 1040NR, lines 10a and 10b. Freetaxusa com You do not include these dividends on Form 8814, line 12, or on line 21 of Form 1040 or Form 1040NR. Freetaxusa com   Enter the child's qualified dividends on Form 8814, line 2b. Freetaxusa com But do not include this amount on Form 1040, lines 9a and 9b, or Form 1040NR, lines 10a and 10b. Freetaxusa com Instead, include the amount from Form 8814, line 9, on Form 1040, lines 9a and 9b, or Form 1040NR, lines 10a and 10b. Freetaxusa com (The amount on Form 8814, line 9, may be less than the amount on Form 8814, line 2b, because lines 7 through 12 of the form divide the $2,000 base amount on Form 8814, line 5, between the child's qualified dividends, capital gain distributions, and other interest and dividend income, reducing each of those amounts. Freetaxusa com ) Capital gain distributions. Freetaxusa com   Enter on Form 8814, line 3, any capital gain distributions your child received. Freetaxusa com The amount of these distributions that is added to your income must be reported on Schedule D (Form 1040), line 13, or, if you are not required to file Schedule D, on Form 1040, line 13, or Form 1040NR, line 14. Freetaxusa com You do not include it on Form 8814, line 12, or on line 21 of Form 1040 or Form 1040NR. Freetaxusa com   Include the amount from Form 8814, line 10, on Schedule D, line 13; Form 1040, line 13; or Form 1040NR, line 14, whichever applies. Freetaxusa com (The amount on Form 8814, line 10, may be less than the amount on Form 8814, line 3, because lines 7 through 12 of the form divide the $2,000 base amount on Form 8814, line 5, between the child's qualified dividends, capital gain distributions, and other interest and dividend income, reducing each of those amounts. Freetaxusa com ) Collectibles (28% rate) gain. Freetaxusa com    If any of the child's capital gain distributions are reported on Form 1099-DIV as collectibles (28% rate) gain, you must determine how much to also include on line 4 of the 28% Rate Gain Worksheet, in the instructions for Schedule D, line 18. Freetaxusa com Multiply the child's capital gain distribution included on Schedule D, line 13, by a fraction. Freetaxusa com The numerator is the part of the child's total capital gain distribution that is collectibles (28% rate) gain. Freetaxusa com The denominator is the child's total capital gain distribution. Freetaxusa com Enter the result on line 4 of the 28% Rate Gain Worksheet. Freetaxusa com Unrecaptured section 1250 gain. Freetaxusa com   If any of the child's capital gain distributions are reported on Form 1099-DIV as unrecaptured section 1250 gain, you must determine how much to include on line 11 of the Unrecaptured Section 1250 Gain Worksheet in the instructions for Schedule D, line 19. Freetaxusa com Multiply the child's capital gain distribution included on Schedule D, line 13, by a fraction. Freetaxusa com The numerator is the part of the child's total capital gain distribution that is unrecaptured section 1250 gain. Freetaxusa com The denominator is the child's total capital gain distribution. Freetaxusa com Enter the result on the Unrecaptured Section 1250 Gain Worksheet, line 11. Freetaxusa com Section 1202 gain. Freetaxusa com   If any of the child's capital gain distributions are reported as section 1202 gain (gain on qualified small business stock) on Form 1099-DIV, part or all of that gain may be eligible for the section 1202 exclusion. Freetaxusa com (For information about the exclusion, see chapter 4 of Publication 550. Freetaxusa com ) To figure that part, multiply the child's capital gain distribution included on Schedule D, line 13, by a fraction. Freetaxusa com The numerator is the part of the child's total capital gain distribution that is section 1202 gain. Freetaxusa com The denominator is the child's total capital gain distribution. Freetaxusa com Your section 1202 exclusion is generally 50% of the result, but may be subject to a limit. Freetaxusa com In some cases, the exclusion is more than 50%. Freetaxusa com See the instructions for Schedule D for details and information on how to report the exclusion amount. Freetaxusa com Example. Freetaxusa com Fred is 6 years old. Freetaxusa com In 2013, he received dividend income of $2,100, which included $1,575 of ordinary dividends and a $525 capital gain distribution from a mutual fund. Freetaxusa com (None of the distributions were reported on Form 1099-DIV as unrecaptured section 1250 gain, section 1202 gain, or collectibles (28% rate) gain. Freetaxusa com ) All of the ordinary dividends are qualified dividends. Freetaxusa com He has no other income and is not subject to backup withholding. Freetaxusa com No estimated tax payments were made under his name and social security number. Freetaxusa com Fred's parents elect to include Fred's income on their tax return instead of filing a return for him. Freetaxusa com They figure the amount to report on Form 1040, lines 9a and 9b, the amount to report on their Schedule D, line 13, and the amount to report on Form 1040, line 21, as follows. Freetaxusa com They leave lines 1a and 1b of Form 8814 blank because Fred does not have any interest income. Freetaxusa com They enter his ordinary dividends of $1,575 on lines 2a and 2b because all of Fred's ordinary dividends are qualified dividends. Freetaxusa com They enter the amount of Fred's capital gain distributions, $525, on line 3. Freetaxusa com Next, they add the amounts on lines 1a, 2a, and 3 and enter the result, $2,100, on line 4. Freetaxusa com They subtract the base amount on line 5, $2,000, from the amount on line 4, $2,100, and enter the result, $100, on line 6. Freetaxusa com This is the total amount from Form 8814 to be reported on their return. Freetaxusa com Next, they figure how much of this amount is qualified dividends and how much is capital gain distributions. Freetaxusa com They divide the amount on line 2b, $1,575, by the amount on line 4, $2,100. Freetaxusa com They enter the result, . Freetaxusa com 75, on line 7. Freetaxusa com They divide the amount on line 3, $525, by the amount on line 4, $2,100. Freetaxusa com They enter the result, . Freetaxusa com 25, on line 8. Freetaxusa com They multiply the amount on line 6, $100, by the decimal on line 7, . Freetaxusa com 75, and enter the result, $75, on line 9. Freetaxusa com They multiply the amount on line 6, $100, by the decimal on line 8, . Freetaxusa com 25, and enter the result, $25, on line 10. Freetaxusa com They include the amount from line 9, $75, on lines 9a and 9b of their Form 1040 and enter “Form 8814 – $75” on the dotted lines next to lines 9a and 9b. Freetaxusa com They include the amount from line 10, $25, on line 13 of their Schedule D (Form 1040) and enter “Form 8814 – $25” on the dotted line next to Schedule D, line 13. Freetaxusa com They enter $100 ($75 + $25) on line 11 and -0- ($100 – $100) on line 12. Freetaxusa com Because the amount on line 12 is -0-, they do not include any amount from Form 8814 on their Form 1040, line 21. Freetaxusa com Figuring Additional Tax Use Form 8814, Part II, to figure the tax on the $2,000 of your child's interest and dividends that you do not include in your income. Freetaxusa com This tax is added to the tax figured on your income. Freetaxusa com This additional tax is the smaller of: 10% x (your child's gross income − $1,000), or $100. Freetaxusa com Include the amount from line 15 of all your Forms 8814 in the total on Form 1040, line 44, or Form 1040NR, line 42. Freetaxusa com Check box a on Form 1040, line 44, or Form 1040NR, line 42. Freetaxusa com Tax for Certain Children Who Have Unearned Income If a child's interest, dividends, and other unearned income total more than $2,000, part of that income may be taxed at the parent's tax rate instead of the child's tax rate. Freetaxusa com If the parent does not or cannot choose to include the child's income on the parent's return, use Form 8615 to figure the child's tax. Freetaxusa com Attach the completed form to the child's Form 1040, Form 1040A, or Form 1040NR. Freetaxusa com When Form 8615 must be filed. Freetaxusa com   Form 8615 must be filed for a child if all of the following statements are true. Freetaxusa com The child's unearned income was more than $2,000. Freetaxusa com The child is required to file a return for 2013. Freetaxusa com The child either: Was under age 18 at the end of the year, Was age 18 at the end of the year and did not have earned income that was more than half of his or her support, or Was over age 18 and under age 24 at the end of the year, was a full-time student, and did not have earned income that was more than half of his or her support. Freetaxusa com At least one of the child's parents was alive at the end of 2013. Freetaxusa com The child does not file a joint return for 2013. Freetaxusa com These conditions are also shown in Figure 2. Freetaxusa com Certain January 1 birthdays. Freetaxusa com   Use the following chart to determine whether certain children with January 1 birthdays meet condition 3 under When Form 8615 must be filed. Freetaxusa com IF a child was born on. Freetaxusa com . Freetaxusa com . Freetaxusa com THEN, at the end of 2013, the child is considered to be. Freetaxusa com . Freetaxusa com . Freetaxusa com January 1, 1996 18* January 1, 1995 19** January 1, 1990 24*** *This child is not under age 18. Freetaxusa com The child meets condition 3 only if the child did not have earned income that was more than half of the child's support. Freetaxusa com  **This child meets condition 3 only if the child was a full-time student who did not have earned income that was more than half of the child's support. Freetaxusa com  ***Do not use Form 8615 for this child. Freetaxusa com Figure 2. Freetaxusa com Do You Have To Use Form 8615 To Figure Your Child's Tax? Please click here for the text description of the image. Freetaxusa com Figure 2. Freetaxusa com Do You Have To Use Form 8615 To Figure Your Child's Tax? Providing Parental Information (Form 8615, Lines A–C) On Form 8615, lines A and B, enter the parent's name and social security number. Freetaxusa com (If the parents filed a joint return, enter the name and social security number listed first on the joint return. Freetaxusa com ) On line C, check the box for the parent's filing status. Freetaxusa com See Which Parent's Return To Use, earlier, for information on which parent's return information must be used on Form 8615. Freetaxusa com Parent with different tax year. Freetaxusa com   If the parent and the child do not have the same tax year, complete Form 8615 using the information on the parent's return for the tax year that ends in the child's tax year. Freetaxusa com Example. Freetaxusa com Kimberly must use her mother's tax and taxable income to complete her Form 8615 for calendar year 2013 (January 1 – December 31). Freetaxusa com Kimberly's mother files her tax return on a fiscal year basis (July 1 – June 30). Freetaxusa com Kimberly must use the information on her mother's return for the tax year ending June 30, 2013, to complete her 2013 Form 8615. Freetaxusa com Parent's return information not known timely. Freetaxusa com   If the information needed from the parent's return is not known by the time the child's return is due (usually April 15), you can file the return using estimates. Freetaxusa com   You can use any reasonable estimate. Freetaxusa com This includes using information from last year's return. Freetaxusa com If you use an estimated amount on Form 8615, enter “Estimated” on the line next to the amount. Freetaxusa com   When you get the correct information, file an amended return on Form 1040X, Amended U. Freetaxusa com S. Freetaxusa com Individual Income Tax Return. Freetaxusa com Extension of time to file. Freetaxusa com   Instead of using estimates, you can get an automatic 6-month extension of time to file if, by the date your return is due, you file Form 4868, Application for Automatic Extension of Time To File U. Freetaxusa com S. Freetaxusa com Individual Income Tax Return. Freetaxusa com See the instructions for Form 4868 for details. Freetaxusa com    An extension of time to file is not an extension of time to pay. Freetaxusa com You must make an accurate estimate of the tax for 2013. Freetaxusa com If you do not pay the full amount due by the regular due date, the child will owe interest and may also be charged penalties. Freetaxusa com See Form 4868 and its instructions. Freetaxusa com Parent's return information not available. Freetaxusa com   If a child cannot get the required information about his or her parent's tax return, the child (or the child's legal representative) can request the necessary information from the Internal Revenue Service (IRS). Freetaxusa com How to request. Freetaxusa com   After the end of the tax year, send a signed, written request for the information to the Internal Revenue Service Center where the parent's return will be filed. Freetaxusa com (The IRS cannot process a request received before the end of the tax year. Freetaxusa com )    You should also consider getting an extension of time to file the child's return, because there may be a delay in getting the requested information. Freetaxusa com   The request must contain all of the following. Freetaxusa com A statement that you are making the request to comply with section 1(g) of the Internal Revenue Code and that you have tried to get the information from the parent. Freetaxusa com Proof of the child's age (for example, a copy of the child's birth certificate). Freetaxusa com Evidence the child has more than $2,000 of unearned income (for example, a copy of the child's prior year tax return or copies of Forms 1099 for the current year). Freetaxusa com The name, address, social security number (if known), and filing status (if known) of the parent whose information is to be shown on Form 8615. Freetaxusa com    A child's legal representative making the request should include a copy of his or her Power of Attorney, such as Form 2848, or proof of legal guardianship. Freetaxusa com Step 1. Freetaxusa com Figuring the Child's Net Unearned Income (Form 8615, Part I) The first step in figuring a child's tax using Form 8615 is to figure the child's net unearned income. Freetaxusa com To do that, use Form 8615, Part I. Freetaxusa com Line 1 (Unearned Income) If the child had no earned income, enter on this line the adjusted gross income shown on the child's return. Freetaxusa com Adjusted gross income is shown on Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37. Freetaxusa com Form 1040EZ and Form 1040NR-EZ cannot be used if Form 8615 must be filed. Freetaxusa com If the child had earned income, figure the amount to enter on Form 8615, line 1, by using the worksheet in the instructions for the form. Freetaxusa com However, use the following worksheet if: the child has excluded any foreign earned income, deducted a loss from self-employment, or has a net operating loss from another year. Freetaxusa com Alternate Worksheet for Form 8615, Line 1 A. Freetaxusa com Enter the amount from the child's Form 1040, line 22, or Form 1040NR, line 23   B. Freetaxusa com Enter the total of any net loss  from self-employment, any net operating loss deduction, any foreign earned income exclusion, and any foreign housing exclusion from the child's Form 1040 or Form 1040NR. Freetaxusa com Enter this total as a positive number (greater than zero)   C. Freetaxusa com Add line A and line B and  enter the total   D. Freetaxusa com Enter the child's earned income plus any amount from the child's Form 1040, line 30, or the child's Form 1040NR, line 30     Generally, the child's earned income is the total of the amounts reported on Form 1040, lines 7, 12, and 18 (if line 12 or 18 is a loss, use zero) or Form 1040NR, lines 8, 13, and 19 (if line 13 or 19 is a loss, use zero)   E. Freetaxusa com Subtract line D from line C. Freetaxusa com Enter the result here and on Form 8615, line 1   Unearned income defined. Freetaxusa com   Unearned income is generally all income other than salaries, wages, and other amounts received as pay for work actually performed. Freetaxusa com It includes taxable interest, dividends, capital gains (including capital gain distributions), the taxable part of social security and pension payments, certain distributions from trusts, and unemployment compensation. Freetaxusa com Unearned income includes amounts produced by assets the child obtained with earned income (such as interest on a savings account into which the child deposited wages). Freetaxusa com Nontaxable income. Freetaxusa com   For this purpose, unearned income includes only amounts the child must include in gross income. Freetaxusa com Nontaxable unearned income, such as tax-exempt interest and the nontaxable part of social security and pension payments, is not included. Freetaxusa com Capital loss. Freetaxusa com   A child's capital losses are taken into account in figuring the child's unearned income. Freetaxusa com Capital losses are first applied against capital gains. Freetaxusa com If the capital losses are more than the capital gains, the difference (up to $3,000) is subtracted from the child's interest, dividends, and other unearned income. Freetaxusa com Any difference over $3,000 is carried to the next year. Freetaxusa com Income from property received as a gift. Freetaxusa com   A child's unearned income includes all income produced by property belonging to the child. Freetaxusa com This is true even if the property was transferred to the child, regardless of when the property was transferred or purchased or who transferred it. Freetaxusa com   A child's unearned income includes income produced by property given as a gift to the child. Freetaxusa com This includes gifts to the child from grandparents or any other person and gifts made under the Uniform Gift to Minors Act. Freetaxusa com Example. Freetaxusa com Amanda Black, age 13, received the following income. Freetaxusa com Dividends—$800 Wages—$2,100 Taxable interest—$1,200 Tax-exempt interest—$100 Capital gains—$300 Capital losses—($200) The dividends were qualified dividends on stock given to her by her grandparents. Freetaxusa com Amanda's unearned income is $2,100. Freetaxusa com This is the total of the dividends ($800), taxable interest ($1,200), and capital gains reduced by capital losses ($300 − $200 = $100). Freetaxusa com Her wages are earned (not unearned) income because they are received for work actually performed. Freetaxusa com Her tax-exempt interest is not included because it is nontaxable. Freetaxusa com Trust income. Freetaxusa com   If a child is the beneficiary of a trust, distributions of taxable interest, dividends, capital gains, and other unearned income from the trust are unearned income to the child. Freetaxusa com   However, taxable distributions from a qualified disability trust are considered earned income for the purposes of completing Form 8615. Freetaxusa com See the Form 8615 instructions for details. Freetaxusa com Adjustment to income. Freetaxusa com   In figuring the amount to enter on line 1, the child's unearned income is reduced by any penalty on the early withdrawal of savings. Freetaxusa com Line 2 (Deductions) If the child does not itemize deductions on Schedule A (Form 1040 or Form 1040NR), enter $2,000 on line 2. Freetaxusa com If the child itemizes deductions, enter on line 2 the larger of: $1,000 plus the portion of the child's itemized deductions on Schedule A (Form 1040), line 29 (or Schedule A (Form 1040NR), line 15), that are directly connected with the production of the unearned income entered on line 1, or $2,000. Freetaxusa com Directly connected. Freetaxusa com   Itemized deductions are directly connected with the production of unearned income if they are for expenses paid to produce or collect taxable income or to manage, conserve, or maintain property held for producing income. Freetaxusa com These expenses include custodian fees and service charges, service fees to collect taxable interest and dividends, and certain investment counsel fees. Freetaxusa com    These expenses are added to certain other miscellaneous itemized deductions on Schedule A (Form 1040). Freetaxusa com Only the amount greater than 2% of the child's adjusted gross income can be deducted. Freetaxusa com See Publication 529, Miscellaneous Deductions, for more information. Freetaxusa com Example 1. Freetaxusa com Roger, age 12, has unearned income of $8,000, no other income, no adjustments to income, and itemized deductions of $300 (net of the 2%-of-adjusted-gross-income limit) that are directly connected with his unearned income. Freetaxusa com His adjusted gross income is $8,000, which is entered on Form 1040, line 38, and on Form 8615, line 1. Freetaxusa com Roger enters $2,000 on line 2 because that is more than the total of $1,000 plus his directly-connected itemized deductions of $300. Freetaxusa com Example 2. Freetaxusa com Eleanor, age 8, has unearned income of $16,000 and an early withdrawal penalty of $100. Freetaxusa com She has no other income. Freetaxusa com She has itemized deductions of $1,050 (net of the 2%-of-adjusted-gross-income limit) that are directly connected with the production of her unearned income. Freetaxusa com Her adjusted gross income, entered on line 1, is $15,900 ($16,000 − $100). Freetaxusa com The amount on line 2 is $2,050. Freetaxusa com This is the larger of: $1,000 plus the $1,050 of directly connected itemized deductions, or $2,000. Freetaxusa com Line 3 Subtract line 2 from line 1 and enter the result on this line. Freetaxusa com If zero or less, do not complete the rest of the form. Freetaxusa com However, you must still attach Form 8615 to the child's tax return. Freetaxusa com Figure the tax on the child's taxable income in the normal manner. Freetaxusa com Line 4 (Child's Taxable Income) Enter on line 4 the child's taxable income from Form 1040, line 43; Form 1040A, line 27; or Form 1040NR, line 41. Freetaxusa com Child files Form 2555 or 2555-EZ. Freetaxusa com   If the child files Form 2555 or 2555-EZ to claim the foreign earned income exclusion, housing exclusion, or housing deduction, the Foreign Earned Income Tax Worksheet (in the Form 1040 instructions) is used to figure the child's tax. Freetaxusa com Enter the amount from line 3 of the Foreign Earned Income Tax Worksheet as the child's taxable income on Form 8615, line 4. Freetaxusa com Line 5 (Net Unearned Income) A child's net unearned income cannot be more than his or her taxable income. Freetaxusa com Enter on Form 8615, line 5, the smaller of line 3 or line 4. Freetaxusa com This is the child's net unearned income. Freetaxusa com If zero or less, do not complete the rest of the form. Freetaxusa com However, you must still attach Form 8615 to the child's tax return. Freetaxusa com Figure the tax on the child's taxable income in the normal manner. Freetaxusa com Step 2. Freetaxusa com Figuring a Tentative Tax at the Parent's Tax Rate (Form 8615, Part II) The next step in completing Form 8615 is to figure a tentative tax on the child's net unearned income at the parent's tax rate. Freetaxusa com The tentative tax at the parent's tax rate is the difference between the tax on the parent's taxable income figured with the child's net unearned income (plus the net unearned income of any other child whose Form 8615 includes the tax return information of that parent) and the tax figured without it. Freetaxusa com When figuring the tentative tax at the parent's tax rate on Form 8615, do not refigure any of the exclusions, deductions, or credits on the parent's return because of the child's net unearned income. Freetaxusa com For example, do not refigure the medical expense deduction. Freetaxusa com Figure the tentative tax on Form 8615, lines 6 through 13. Freetaxusa com Line 6 (Parent's Taxable Income) Enter on line 6 the amount from the parent's Form 1040, line 43; Form 1040A, line 27; Form 1040EZ, line 6; Form 1040NR, line 41; or Form 1040NR-EZ, line 14. Freetaxusa com If the parent's taxable income is zero or less, enter zero on line 6. Freetaxusa com Parent files Form 2555 or 2555-EZ. Freetaxusa com   If the parent files Form 2555 or 2555-EZ to claim the foreign earned income exclusion, housing exclusion, or housing deduction, the Foreign Earned Income Tax Worksheet in the Form 1040 instructions is used to figure the parent's tax. Freetaxusa com Enter the amount from line 3 of the Foreign Earned Income Tax Worksheet as the parent's taxable income, on line 6 of Form 8615. Freetaxusa com Line 7 (Net Unearned Income of Other Children) If the tax return information of the parent is also used on any other child's Form 8615, enter on line 7 the total of the amounts from line 5 of all the other children's Forms 8615. Freetaxusa com Do not include the amount from line 5 of the Form 8615 being completed. Freetaxusa com (The term “other child” means any other child whose Form 8615 uses the tax information of the parent identified on Lines A and B of Form 8615. Freetaxusa com ) Example. Freetaxusa com Paul and Jane Persimmon have three children, Sharon, Jerry, and Mike, who must attach Form 8615 to their tax returns. Freetaxusa com The children's net unearned income amounts on line 5 of their Forms 8615 are: Sharon—$800 Jerry—$600 Mike—$1,000 Line 7 of Sharon's Form 8615 will show $1,600, the total of the amounts on line 5 of Jerry's and Mike's Forms 8615. Freetaxusa com Line 7 of Jerry's Form 8615 will show $1,800 ($800 + $1,000). Freetaxusa com Line 7 of Mike's Form 8615 will show $1,400 ($800 + $600). Freetaxusa com Other children's information not available. Freetaxusa com   If the net unearned income of the other children is not available when the return is due, either file the return using estimates or get an extension of time to file. Freetaxusa com Estimates and extensions are discussed earlier under Providing Parental Information (Form 8615, Lines A–C) . Freetaxusa com Line 8 (Parent's Taxable Income Plus Children's Net Unearned Income) Enter on this line the total of lines 5, 6, and 7. Freetaxusa com You must determine the amount of net capital gain and qualified dividends included on this line before completing Form 8615, line 9. Freetaxusa com Net capital gain. Freetaxusa com   Net capital gain is the smaller of the gain, if any, on Schedule D (Form 1040), line 15, or the gain, if any, on Schedule D, line 16. Freetaxusa com If Schedule D is not required, it is the amount on Form 1040, line 13; Form 1040A, line 10; or Form 1040NR, line 14. Freetaxusa com Qualified dividends. Freetaxusa com   Qualified dividends are those dividends reported on line 9b of Form 1040 or Form 1040A, or line 10b of Form 1040NR. Freetaxusa com Net capital gain and qualified dividends on line 8. Freetaxusa com   If neither the child, nor the parent, nor any other child has net capital gain, the net capital gain on line 8 is zero. Freetaxusa com   If neither the child, nor the parent, nor any other child has qualified dividends, the amount of qualified dividends on line 8 is zero. Freetaxusa com   If the child, parent, or any other child has net capital gain, figure the amount of net capital gain included on line 8 by adding together the net capital gain amounts included on lines 5, 6, and 7 of Form 8615. Freetaxusa com   If the child, parent, or any other child has qualified dividends, figure the amount of qualified dividends included on line 8 by adding together the qualified dividend amounts included on lines 5, 6, and 7. Freetaxusa com   Use the instructions for Form 8615, line 8, including the appropriate Line 5 Worksheet, to find these amounts. Freetaxusa com See the instructions for Form 8615 for more details. Freetaxusa com Note. Freetaxusa com The amount of any net capital gain or qualified dividends is not separately reported on line 8. Freetaxusa com It is  needed, however, when figuring the tax on line 9. Freetaxusa com Line 9 (Tax on Parent's Taxable Income Plus Children's Net Unearned Income) Figure the tax on the amount on line 8 using the Tax Table, the Tax Computation Worksheet, the Qualified Dividends and Capital Gain Tax Worksheet (in the Form 1040, 1040A, or 1040NR instructions), the Schedule D Tax Worksheet (in the Schedule D instructions), or Schedule J (Form 1040), as follows. Freetaxusa com If line 8 does not include any net capital gain or qualified dividends, use the Tax Table or Tax Computation Worksheet to figure this tax. Freetaxusa com But if Schedule J, Income Averaging for Farmers and Fishermen, is used to figure the tax on the parent's return, use it to figure this tax. Freetaxusa com If line 8 includes any net capital gain or qualified dividends, use the Qualified Dividends and Capital Gain Tax Worksheet to figure this tax. Freetaxusa com For details, see the instructions for Form 8615, line 9. Freetaxusa com However, if the child, parent, or any other child has 28% rate gain or unrecaptured section 1250 gain, use the Schedule D Tax Worksheet. Freetaxusa com But if Schedule J is used to figure the tax on the parent's return, use it to figure this tax. Freetaxusa com Child files Form 2555 or 2555-EZ. Freetaxusa com   If line 8 includes any net capital gain or qualified dividends and the child, or any other child filing Form 8615, also files Form 2555 or 2555-EZ, use Using the Schedule D Tax Worksheet for line 9 tax, next, to figure the line 9 tax. Freetaxusa com Using the Schedule D Tax Worksheet for line 9 tax. Freetaxusa com    Use the Schedule D Tax Worksheet (in the Schedule D instructions) to figure the line 9 tax on Form 8615 if the child, parent, or any other child has unrecaptured section 1250 gain or 28% rate gain. Freetaxusa com If you must use the Schedule D Tax Worksheet, first complete any Schedule D and any actual Schedule D Tax Worksheet required for the child, parent, or any other child. Freetaxusa com Then figure the line 9 tax using another Schedule D Tax Worksheet. Freetaxusa com (Do not attach this Schedule D Tax Worksheet to the child's return. Freetaxusa com )   Complete this Schedule D Tax Worksheet as follows. Freetaxusa com On line 1, enter the amount from Form 8615, line 8. Freetaxusa com On line 2, enter the qualified dividends included on Form 8615, line 8. Freetaxusa com (See the earlier discussion for line 8. Freetaxusa com ) On line 3, enter the total of the amounts, if any, on line 4g of all Forms 4952 filed by the child, parent, or any other child. Freetaxusa com On line 4, enter the total of the amounts, if any, on line 4e of all Forms 4952 filed by the child, parent, or any other child. Freetaxusa com If applicable, include instead the smaller amount entered on the dotted line next to line 4e. Freetaxusa com On lines 5 and 6, follow the worksheet instructions. Freetaxusa com On line 7, enter the net capital gain included on Form 8615, line 8. Freetaxusa com (See the earlier discussion for line 8. Freetaxusa com ) On lines 8 through 10, follow the worksheet instructions. Freetaxusa com On line 11, enter zero if neither the child, nor the parent, nor any other child has unrecaptured section 1250 gain (Schedule D, line 19) or 28% rate gain (Schedule D, line 18). Freetaxusa com Otherwise, enter the amount of unrecaptured section 1250 gain and 28% rate gain included in the net capital gain on line 8 of Form 8615. Freetaxusa com Figure these amounts as explained later under Figuring unrecaptured section 1250 gain (line 11) and Figuring 28% rate gain (line 11). Freetaxusa com If the Foreign Earned Income Tax Worksheet was used to figure the parent's tax or the tax of any child, go to step 10 below. Freetaxusa com Otherwise, skip steps 10, 11, and 12 below, and go to step 13. Freetaxusa com Determine whether there is a line 8 capital gain excess as follows. Freetaxusa com Add the amounts on line 2 of all Foreign Earned Income Tax Worksheets completed by the parent or any child for whom Form 8615 is filed. Freetaxusa com (But for each child do not add more than the excess, if any, of the amount on line 5 of the child's Form 8615 over the child's taxable income on Form 1040, line 43; Form 1040A, line 27; or Form 1040NR, line 41. Freetaxusa com ) Subtract (a) from the amount on line 1 of this Schedule D Tax Worksheet. Freetaxusa com Subtract (b) from the amount on line 10 of this Schedule D Tax Worksheet. Freetaxusa com If the result is more than zero, that amount is the line 8 capital gain excess. Freetaxusa com If the result is zero or less, there is no line 8 capital gain excess. Freetaxusa com If there is no line 8 capital gain excess, skip step 12 below and go to step 13. Freetaxusa com If there is a line 8 capital gain excess, complete a second Schedule D Tax Worksheet as instructed above and in step 13, but in its entirety and with the following additional modifications. Freetaxusa com (These modifications are to be made only for purposes of filling out this additional Schedule D Tax Worksheet. Freetaxusa com ) Reduce the amount you would otherwise enter on line 9 (but not below zero) by the line 8 capital gain excess. Freetaxusa com Reduce the amount you would otherwise enter on line 6 (but not below zero) by any of the line 8 capital gain excess not used in (a) above. Freetaxusa com If the child, parent, or any other child has 28% rate gain, reduce the amount you would otherwise enter on line 8 of Worksheet 1 for Line 11 of the Schedule D Tax Worksheet – 28% Rate Gain (Line 9 Tax), shown later, (but not below zero) by the line 8 capital gain excess, and refigure the amount on line 11 of this Schedule D Tax Worksheet. Freetaxusa com If the child, parent, or any other child has unrecaptured section 1250 gain, reduce the amount you would otherwise enter on line 8 of Worksheet 2 for Line 11 of the Schedule D Tax Worksheet – Unrecaptured Section 1250 Gain (Line 9 Tax) (but not below zero) by the line 8 capital gain excess not used in 12(c), and refigure the amount on line 11 of this Schedule D Tax Worksheet. Freetaxusa com Complete lines 12 through 45 following the worksheet instructions. Freetaxusa com Use the parent's filing status to complete lines 15, 42, and 44. Freetaxusa com Enter the amount from line 45 of this Schedule D Tax Worksheet on Form 8615, line 9, and check the box on that line