Posted on January 23, 2010.
Should I charge interest on savings bonds with dependent children? I have 2 dependent children, 16 and 18, which are still in school and live with me. They cashed in savings bonds mature this year 1099 and the forms arrived. The bonds were in their names and forms in 1099 have their name on them, not mine. Should I report the interest on my tax return?
Dear C: Good question and there are a few questions.
You had the opportunity to declare the interest each year that bonds matured and I guess you do not use this option. Reported for children.
Now, interest is taxable to the child. If the young child (under 18) had an interest over $ 1,900 and the interest is reported on your return, it will be taxed at your marginal tax rate. This is called the "kiddie tax" and is calculated on Form 8615. If your oldest is 18 and the end of 2009, the same rules apply.
If your interest savings bonds is less than $ 1,900, children are exempt from the "kiddie tax".
You can declare the interest of the children in your report or prepare a return for children. You can save money by simply adding the interest of the children in your statement.
This opinion has been prepared based on our understanding of the tax legislation in force at the time it was written as it applies to the facts you provided. Click on my profile for more information. Registered Agent Errol Quinn
no
they may have to file their own, depends on the amount of interest it was like over $ 900?
