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Tax Ez Form 2011

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Tax Ez Form 2011

Tax ez form 2011 5. Tax ez form 2011   Ministers and Church Employees Table of Contents Alternative Limit for Church Employees Changes to Includible Compensation for Most Recent Year of ServiceChanges to Includible Compensation Changes to Years of Service Self-employed ministers and church employees who participate in 403(b) plans generally follow the same rules as other 403(b) plan participants. Tax ez form 2011 This means that if you are a self-employed minister or a church employee, your MAC generally is the lesser of: Your limit on annual additions, or Your limit on elective deferrals. Tax ez form 2011 For most ministers and church employees, the limit on annual additions is figured without any changes. Tax ez form 2011 This means that if you are a minister or church employee, your limit on annual additions generally is the lesser of: $51,000 for 2013 and $52,000 for 2014, or Your includible compensation for your most recent year of service. Tax ez form 2011 Although, in general, the same limit applies, church employees can choose an alternative limit and there are changes in how church employees, foreign missionaries, and self-employed ministers figure includible compensation for the most recent year of service. Tax ez form 2011 This chapter will explain the alternative limit and the changes. Tax ez form 2011 Who is a church employee?   A church employee is anyone who is an employee of a church or a convention or association of churches, including an employee of a tax-exempt organization controlled by or associated with a church or a convention or association of churches. Tax ez form 2011 Alternative Limit for Church Employees If you are a church employee, you can choose to use $10,000 a year as your limit on annual additions, even if your annual additions computed under the general rule is less. Tax ez form 2011 Total contributions over your lifetime under this choice cannot be more than $40,000. Tax ez form 2011 Changes to Includible Compensation for Most Recent Year of Service There are two types of changes in determining includible compensation for the most recent year of service. Tax ez form 2011 They are: Changes in how the includible compensation of foreign missionaries and self-employed ministers is figured, and A change to the years that are counted when figuring the most recent year of service for church employees and self-employed ministers. Tax ez form 2011 Changes to Includible Compensation Includible compensation is figured differently for foreign missionaries and self-employed ministers. Tax ez form 2011 Foreign missionary. Tax ez form 2011   If you are a foreign missionary, your includible compensation includes foreign earned income that may otherwise be excludable from your gross income under section 911. Tax ez form 2011   If you are a foreign missionary, and your adjusted gross income is $17,000 or less, contributions to your 403(b) account will not be treated as exceeding the limit on annual additions if the contributions are not in excess of $3,000. Tax ez form 2011   You are a foreign missionary if you are either a layperson or a duly ordained, commissioned, or licensed minister of a church and you meet both of the following requirements. Tax ez form 2011 You are an employee of a church or convention or association of churches. Tax ez form 2011 You are performing services for the church outside the United States. Tax ez form 2011 Self-employed minister. Tax ez form 2011   If you are a self-employed minister, you are treated as an employee of a tax-exempt organization that is a qualified employer. Tax ez form 2011 Your includible compensation is your net earnings from your ministry minus the contributions made to the retirement plan on your behalf and the deductible portion of your self-employment tax. Tax ez form 2011 Changes to Years of Service Generally, only service with the employer who maintains your 403(b) account can be counted when figuring your limit on annual additions. Tax ez form 2011 Church employees. Tax ez form 2011   If you are a church employee, treat all of your years of service as an employee of a church or a convention or association of churches as years of service with one employer. Tax ez form 2011 Self-employed minister. Tax ez form 2011   If you are a self-employed minister, your years of service include full and part years during which you were self-employed. Tax ez form 2011 Prev  Up  Next   Home   More Online Publications
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The Tax Ez Form 2011

Tax ez form 2011 31. Tax ez form 2011   Tax on Unearned Income of Certain Children Table of Contents What's New Introduction Useful Items - You may want to see: Which Parent's Return To UseParents Who Do Not File a Joint Return 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. Tax ez form 2011 Figuring the Child's Net Unearned Income (Form 8615, Part I) Step 2. Tax ez form 2011 Figuring Tentative Tax at the Parent's Tax Rate (Form 8615, Part II) Step 3. Tax ez form 2011 Figuring the Child's Tax (Form 8615, Part III) What's New Net Investment Income Tax. Tax ez form 2011 . Tax ez form 2011  For tax years beginning after December 31, 2012, a child whose tax is figured on Form 8615 may be subject to the Net Investment Income Tax (NIIT). Tax ez form 2011 NIIT is a 3. Tax ez form 2011 8% tax on the lesser of the net investment income or the excess of the child's modified adjusted gross income (MAGI) over the threshold amount. Tax ez form 2011 Use Form 8960, Net Investment Income Tax, to figure this tax. Tax ez form 2011 For more information on NIIT, go to www. Tax ez form 2011 irs. Tax ez form 2011 gov and enter “Net Investment Income Tax” in the search box. Tax ez form 2011 Introduction This chapter discusses the following two rules that may affect the tax on unearned income of certain children. Tax ez form 2011 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. Tax ez form 2011 (See Parent's Election To Report Child's Interest and Dividends , later. Tax ez form 2011 ) 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. Tax ez form 2011 (See Tax for Certain Children Who Have Unearned Income , later. Tax ez form 2011 ) For these rules, the term “child” includes a legally adopted child and a stepchild. Tax ez form 2011 These rules apply whether or not the child is a dependent. Tax ez form 2011 Useful Items - You may want to see: Publication 929 Tax Rules for Children and Dependents Form (and Instructions) 8615 Tax for Certain Children Who Have Unearned Income 8814 Parents' Election To Report Child's Interest and Dividends 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. Tax ez form 2011 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 . Tax ez form 2011 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. Tax ez form 2011 Only the parent whose tax return is used can make the election described under Parent's Election To Report Child's Interest and Dividends . Tax ez form 2011 Parents are married. Tax ez form 2011   If the child's parents file separate returns, use the return of the parent with the greater taxable income. Tax ez form 2011 Parents not living together. Tax ez form 2011   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. Tax ez form 2011 If the custodial parent is not considered unmarried, use the return of the parent with the greater taxable income. Tax ez form 2011   For an explanation of when a married person living apart from his or her spouse is considered unmarried, see Head of Household in chapter 2. Tax ez form 2011 Parents are divorced. Tax ez form 2011   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. Tax ez form 2011 Custodial parent remarried. Tax ez form 2011   If the custodial parent has remarried, the stepparent (rather than the noncustodial parent) is treated as the child's other parent. Tax ez form 2011 Therefore, if the custodial parent and the stepparent file a joint return, use that joint return. Tax ez form 2011 Do not use the return of the noncustodial parent. Tax ez form 2011   If the custodial parent and the stepparent are married, but file separate returns, use the return of the one with the greater taxable income. Tax ez form 2011 If the custodial parent and the stepparent are married but not living together, the earlier discussion under Parents not living together applies. Tax ez form 2011 Parents never married. Tax ez form 2011   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. Tax ez form 2011 If the parents did not live together all year, the rules explained earlier under Parents are divorced apply. Tax ez form 2011 Widowed parent remarried. Tax ez form 2011   If a widow or widower remarries, the new spouse is treated as the child's other parent. Tax ez form 2011 The rules explained earlier under Custodial parent remarried apply. Tax ez form 2011 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. Tax ez form 2011 If you do, your child will not have to file a return. Tax ez form 2011 You can make this election only if all the following conditions are met. Tax ez form 2011 Your child was under age 19 (or under age 24 if a full-time student) at the end of the year. Tax ez form 2011 Your child had income only from interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends). Tax ez form 2011 The child's gross income was less than $10,000. Tax ez form 2011 The child is required to file a return unless you make this election. Tax ez form 2011 The child does not file a joint return for the year. Tax ez form 2011 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. Tax ez form 2011 No federal income tax was taken out of your child's income under the backup withholding rules. Tax ez form 2011 You are the parent whose return must be used when applying the special tax rules for children. Tax ez form 2011 (See Which Parent's Return To Use , earlier. Tax ez form 2011 ) These conditions are also shown in Figure 31-A. Tax ez form 2011 Certain January 1 birthdays. Tax ez form 2011   A child born on January 1, 1995, is considered to be age 19 at the end of 2013. Tax ez form 2011 You cannot make this election for such a child unless the child was a full-time student. Tax ez form 2011   A child born on January 1, 1990, is considered to be age 24 at the end of 2013. Tax ez form 2011 You cannot make this election for such a child. Tax ez form 2011 Full-time student. Tax ez form 2011   A full-time student is a child who during some part of each of any 5 calendar months of the year was enrolled as a full-time student at a school, or took a full-time on-farm training course given by a school or a state, county, or local government agency. Tax ez form 2011 A school includes a technical, trade, or mechanical school. Tax ez form 2011 It does not include an on-the-job training course, correspondence school, or school offering courses only through the Internet. Tax ez form 2011 How to make the election. Tax ez form 2011   Make the election by attaching Form 8814 to your Form 1040. Tax ez form 2011 (If you make this election, you cannot file Form 1040A or Form 1040EZ. Tax ez form 2011 ) Attach a separate Form 8814 for each child for whom you make the election. Tax ez form 2011 You can make the election for one or more children and not for others. Tax ez form 2011 Effect of Making the Election The federal income tax on your child's income may be more if you make the Form 8814 election. Tax ez form 2011 Rate may be higher. Tax ez form 2011   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. Tax ez form 2011 This is because the tax rate on the child's income between $1,000 and $2,000 is 10% if you make this election. Tax ez form 2011 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. Tax ez form 2011 Deductions you cannot take. Tax ez form 2011   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. Tax ez form 2011 The additional standard deduction if the child is blind. Tax ez form 2011 The deduction for a penalty on an early withdrawal of your child's savings. Tax ez form 2011 Itemized deductions (such as your child's investment expenses or charitable contributions). Tax ez form 2011 Reduced deductions or credits. Tax ez form 2011   If you use Form 8814, your increased adjusted gross income may reduce certain deductions or credits on your return including the following. Tax ez form 2011 Deduction for contributions to a traditional individual retirement arrangement (IRA). Tax ez form 2011 Deduction for student loan interest. Tax ez form 2011 Itemized deductions for medical expenses, casualty and theft losses, and certain miscellaneous expenses. Tax ez form 2011 Credit for child and dependent care expenses. Tax ez form 2011 Child tax credit. Tax ez form 2011 Education tax credits. Tax ez form 2011 Earned income credit. Tax ez form 2011 Penalty for underpayment of estimated tax. Tax ez form 2011   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. Tax ez form 2011 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. Tax ez form 2011 See chapter 4 for more information. Tax ez form 2011 Figuring Child's Income Use Form 8814, Part I, to figure your child's interest and dividend income to report on your return. Tax ez form 2011 Only the amount over $2,000 is added to your income. Tax ez form 2011 The amount over $2,000 is shown on Form 8814, line 6. Tax ez form 2011 Unless the child's income includes qualified dividends or capital gain distributions (discussed next), the same amount is shown on Form 8814, line 12. Tax ez form 2011 Include the amount from Form 8814, line 12, on Form 1040, line 21. Tax ez form 2011 Enter “Form 8814” on the dotted line next to line 21. Tax ez form 2011 If you file more than one Form 8814, include the total amounts from line 12 of all your Forms 8814 on Form 1040, line 21. Tax ez form 2011 Capital gain distributions and qualified dividends. Tax ez form 2011   If your child's dividend income included any capital gain distributions, see Capital gain distributions under Figuring Child's Income in Publication 929, Part 2. Tax ez form 2011 If your child's dividend income included any qualified dividends, see Qualified dividends under Figuring Child's Income in Publication 929, Part 2. Tax ez form 2011 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. Tax ez form 2011 This tax is added to the tax figured on your income. Tax ez form 2011 This additional tax is the smaller of: 10% × (your child's gross income − $1,000), or $100. Tax ez form 2011 Include the amount from line 15 of all your Forms 8814 in the total on Form 1040, line 44. Tax ez form 2011 Check box a on Form 1040, line 44. Tax ez form 2011 Figure 31-A. Tax ez form 2011 Can You Include Your Child's Income On Your Tax Return? Please click here for the text description of the image. Tax ez form 2011 Figure 31–A. Tax ez form 2011 Can You Include Your Child's Income On Your Tax Return? 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. Tax ez form 2011 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. Tax ez form 2011 Attach the completed form to the child's Form 1040 or Form 1040A. Tax ez form 2011 When Form 8615 must be filed. Tax ez form 2011   Form 8615 must be filed for a child if all of the following statements are true. Tax ez form 2011 The child's investment income was more than $2,000. Tax ez form 2011 The child is required to file a return for 2013. Tax ez form 2011 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. Tax ez form 2011 At least one of the child's parents was alive at the end of 2013. Tax ez form 2011 The child does not file a joint return for 2013. Tax ez form 2011 These conditions are also shown in  Figure 31-B. Tax ez form 2011 Earned income. Tax ez form 2011   Earned income includes salaries, wages, tips, and other payments received for personal services performed. Tax ez form 2011 It does not include unearned income as defined later in this chapter. Tax ez form 2011 Support. Tax ez form 2011   Your child's support includes all amounts spent to provide the child with food, lodging, clothing, education, medical and dental care, recreation, transportation, and similar necessities. Tax ez form 2011 To figure your child's support, count support provided by you, your child, and others. Tax ez form 2011 However, a scholarship received by your child is not considered support if your child is a full-time student. Tax ez form 2011 See chapter 3 for details about support. Tax ez form 2011 Certain January 1 birthdays. Tax ez form 2011   Use the following chart to determine whether certain children with January 1 birthdays meet condition 3 under When Form 8615 must be filed. Tax ez form 2011 Figure 31-B. Tax ez form 2011 Do You Have To Use Form 8615 To Figure Your Child's Tax? Please click here for the text description of the image. Tax ez form 2011 Figure 31-B. Tax ez form 2011 Do You Have To Use Form 8615 To Figure Your Child's Tax?    IF a child was born on. Tax ez form 2011 . Tax ez form 2011 . Tax ez form 2011 THEN, at the end of 2013, the child is considered to be. Tax ez form 2011 . Tax ez form 2011 . Tax ez form 2011 January 1, 1996 18* January 1, 1995 19** January 1, 1990 24*** *This child is not under age 18. Tax ez form 2011 The child meets condition 3 only if the child did not have earned income that was more than half of the child's support. Tax ez form 2011  **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. Tax ez form 2011  ***Do not use Form 8615 for this child. Tax ez form 2011 Providing Parental Information (Form 8615, lines A–C) On Form 8615, lines A and B, enter the parent's name and social security number. Tax ez form 2011 (If the parents filed a joint return, enter the name and social security number listed first on the joint return. Tax ez form 2011 ) On line C, check the box for the parent's filing status. Tax ez form 2011 See Which Parent's Return To Use at the beginning of this chapter for information on which parent's return information must be used on Form 8615. Tax ez form 2011 Parent with different tax year. Tax ez form 2011   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. Tax ez form 2011 Parent's return information not known timely. Tax ez form 2011   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. Tax ez form 2011   You can use any reasonable estimate. Tax ez form 2011 This includes using information from last year's return. Tax ez form 2011 If you use an estimated amount on Form 8615, enter “Estimated” on the line next to the amount. Tax ez form 2011    When you get the correct information, file an amended return on Form 1040X, Amended U. Tax ez form 2011 S. Tax ez form 2011 Individual Income Tax Return. Tax ez form 2011   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. Tax ez form 2011 S. Tax ez form 2011 Individual Income Tax Return. Tax ez form 2011 Extensions are discussed in chapter 1. Tax ez form 2011 Step 1. Tax ez form 2011 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. Tax ez form 2011 To do that, use Form 8615, Part I. Tax ez form 2011 Line 1 (unearned income). Tax ez form 2011   If the child had no earned income, enter on this line the adjusted gross income shown on the child's return. Tax ez form 2011 Adjusted gross income is shown on Form 1040, line 38, or Form 1040A, line 22. Tax ez form 2011 Form 1040EZ cannot be used if Form 8615 must be filed. Tax ez form 2011   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. Tax ez form 2011   However, if the child has: excluded any foreign earned income, deducted either a loss from self-employment, or deducted a net operating loss from another year, then use the Alternate Worksheet for Form 8615, Line 1, in Publication 929 to figure the amount to enter on Form 8615, line 1. Tax ez form 2011 Unearned income defined. Tax ez form 2011   Unearned income is generally all income other than salaries, wages, and other amounts received as pay for work actually done. Tax ez form 2011 It includes taxable interest, dividends (including capital gain distributions), capital gains, unemployment compensation, the taxable part of social security and pension payments, and certain distributions from trusts. Tax ez form 2011 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). Tax ez form 2011 Nontaxable income. Tax ez form 2011   For this purpose, unearned income includes only amounts the child must include in total income. Tax ez form 2011 Nontaxable unearned income, such as tax-exempt interest and the nontaxable part of social security and pension payments, is not included. Tax ez form 2011 Income from property received as a gift. Tax ez form 2011   A child's unearned income includes all income produced by property belonging to the child. Tax ez form 2011 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. Tax ez form 2011   A child's unearned income includes income produced by property given as a gift to the child. Tax ez form 2011 This includes gifts to the child from grandparents or any other person and gifts made under the Uniform Gift to Minors Act. Tax ez form 2011 Example. Tax ez form 2011 Amanda Black, age 13, received the following income. Tax ez form 2011 Dividends — $800 Wages — $2,100 Taxable interest — $1,200 Tax-exempt interest — $100 Net capital gains — $100 The dividends were qualified dividends on stock given to her by her grandparents. Tax ez form 2011 Amanda's unearned income is $2,100. Tax ez form 2011 This is the total of the dividends ($800), taxable interest ($1,200), and net capital gains ($100). Tax ez form 2011 Her wages are earned (not unearned) income because they are received for work actually done. Tax ez form 2011 Her tax-exempt interest is not included because it is nontaxable. Tax ez form 2011 Trust income. Tax ez form 2011   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. Tax ez form 2011   However, for purposes of completing Form 8615, a taxable distribution from a qualified disability trust is considered earned income, not unearned income. Tax ez form 2011 Line 2 (deductions). Tax ez form 2011   If the child does not itemize deductions on Schedule A (Form 1040), enter $2,000 on line 2. Tax ez form 2011   If the child does itemize 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, that are directly connected with the production of unearned income entered on line 1, or $2,000. Tax ez form 2011 Directly connected. Tax ez form 2011   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. Tax ez form 2011 These expenses include custodian fees and service charges, service fees to collect taxable interest and dividends, and certain investment counsel fees. Tax ez form 2011   These expenses are added to certain other miscellaneous itemized deductions on Schedule A (Form 1040). Tax ez form 2011 Only the amount greater than 2% of the child's adjusted gross income can be deducted. Tax ez form 2011 See chapter 28 for more information. Tax ez form 2011 Example 1. Tax ez form 2011 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% limit) that are directly connected with his unearned income. Tax ez form 2011 His adjusted gross income is $8,000, which is entered on Form 1040, line 38, and on Form 8615, line 1. Tax ez form 2011 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. Tax ez form 2011 Example 2. Tax ez form 2011 Eleanor, age 8, has unearned income of $16,000 and an early withdrawal penalty of $100. Tax ez form 2011 She has no other income. Tax ez form 2011 She has itemized deductions of $1,050 (net of the 2% limit) that are directly connected with the production of her unearned income. Tax ez form 2011 Her adjusted gross income, entered on line 1, is $15,900 ($16,000 − $100). Tax ez form 2011 The amount on line 2 is $2,050. Tax ez form 2011 This is the larger of: $1,000 plus the $1,050 of directly connected itemized deductions, or $2,000. Tax ez form 2011 Line 3. Tax ez form 2011   Subtract line 2 from line 1 and enter the result on this line. Tax ez form 2011 If zero or less, do not complete the rest of the form. Tax ez form 2011 However, you must still attach Form 8615 to the child's tax return. Tax ez form 2011 Figure the tax on the child's taxable income in the normal manner. Tax ez form 2011 Line 4 (child's taxable income). Tax ez form 2011   Enter on line 4 the child's taxable income from Form 1040, line 43, or Form 1040A, line 27. Tax ez form 2011   However, if the child files Form 2555 or 2555-EZ to claim the foreign earned income exclusion, housing exclusion, or housing deduction, see the Form 8615 instructions or Pub. Tax ez form 2011 929. Tax ez form 2011 Line 5 (net unearned income). Tax ez form 2011   A child's net unearned income cannot be more than his or her taxable income. Tax ez form 2011 Enter on Form 8615, line 5, the smaller of line 3 or line 4. Tax ez form 2011 This is the child's net unearned income. Tax ez form 2011   If zero or less, do not complete the rest of the form. Tax ez form 2011 However, you must still attach Form 8615 to the child's tax return. Tax ez form 2011 Figure the tax on the child's taxable income in the normal manner. Tax ez form 2011 Step 2. Tax ez form 2011 Figuring 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. Tax ez form 2011 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. Tax ez form 2011 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. Tax ez form 2011 For example, do not refigure the medical expense deduction. Tax ez form 2011 Figure the tentative tax on Form 8615, lines 6 through 13. Tax ez form 2011 Note. Tax ez form 2011 If the child or parent has any capital gains or losses, get Publication 929 for help in completing Form 8615, Part II. Tax ez form 2011 Line 6 (parent's taxable income). Tax ez form 2011   Enter on line 6 the parent's taxable income from Form 1040, line 43, Form 1040A, line 27, or Form 1040EZ, line 6. Tax ez form 2011   If the Foreign Earned Income Tax Worksheet (in the Form 1040 instructions) was used to figure the parent's tax, enter the amount from line 3 of that worksheet instead of the parent's taxable income. Tax ez form 2011 Line 7 (net unearned income of other children). Tax ez form 2011   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. Tax ez form 2011 Do not include the amount from line 5 of the Form 8615 being completed. Tax ez form 2011 Example. Tax ez form 2011 Paul and Jane Persimmon have three children, Sharon, Jerry, and Mike, who must attach Form 8615 to their tax returns. Tax ez form 2011 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. Tax ez form 2011 Line 7 of Jerry's Form 8615 will show $1,800 ($800 + $1,000). Tax ez form 2011 Line 7 of Mike's Form 8615 will show $1,400 ($800 + $600). Tax ez form 2011 Other children's information not available. Tax ez form 2011   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. Tax ez form 2011 See Parent's return information not known timely , earlier. Tax ez form 2011 Line 11 (tentative tax). Tax ez form 2011   Subtract line 10 from line 9 and enter the result on this line. Tax ez form 2011 This is the tentative tax. Tax ez form 2011   If line 7 is blank, skip lines 12a and 12b and enter the amount from line 11 on line 13. Tax ez form 2011 Also skip the discussion for lines 12a and 12b that follows. Tax ez form 2011 Lines 12a and 12b (dividing the tentative tax). Tax ez form 2011   If an amount is entered on line 7, divide the tentative tax shown on line 11 among the children according to each child's share of the total net unearned income. Tax ez form 2011 This is done on lines 12a, 12b, and 13. Tax ez form 2011 Add the amount on line 7 to the amount on line 5 and enter the total on line 12a. Tax ez form 2011 Divide the amount on line 5 by the amount on line 12a and enter the result, as a decimal, on line 12b. Tax ez form 2011 Example. Tax ez form 2011 In the earlier example under Line 7 (net unearned income of other children), Sharon's Form 8615 shows $1,600 on line 7. Tax ez form 2011 The amount entered on line 12a is $2,400, the total of the amounts on lines 5 and 7 ($800 + $1,600). Tax ez form 2011 The decimal on line 12b is  . Tax ez form 2011 333, figured as follows and rounded to three places. Tax ez form 2011   $800 = . Tax ez form 2011 333     $2,400   Step 3. Tax ez form 2011 Figuring the Child's Tax (Form 8615, Part III) The final step in figuring a child's tax using Form 8615 is to determine the larger of: The total of: The child's share of the tentative tax based on the parent's tax rate, plus The tax on the child's taxable income in excess of net unearned income, figured at the child's tax rate, or The tax on the child's taxable income, figured at the child's tax rate. Tax ez form 2011 This is the child's tax. Tax ez form 2011 It is figured on Form 8615, lines 14 through 18. Tax ez form 2011 Alternative minimum tax. Tax ez form 2011   A child may be subject to alternative minimum tax (AMT) if he or she has certain items given preferential treatment under the tax law. Tax ez form 2011 See Alternative Minimum Tax (AMT) in chapter 30. Tax ez form 2011    For more information on who is liable for AMT and how to figure it, see Form 6251, Alternative Minimum Tax—Individuals. Tax ez form 2011 For information on special limits that apply to a child who files Form 6251, see Certain Children Under Age 24 in the Instructions for Form 6251. Tax ez form 2011 Prev  Up  Next   Home   More Online Publications