Yusef,age 15,is a dependent of his parents.In 2019 he earned $5,000 from a part-time job and $8,000 of interest income on bonds given him by his grandparents,resulting in taxable income of $7,650.Under kiddie tax rules,calculation of tax requires dividing taxable income between net unearned income and earned taxable income.Yusef's taxable income will be divided as follows

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Kiddie tax rules require that any unearned income over $2,200 for a dependent child is taxed at the parents' rate. In this case, Yusef has $8,000 of unearned income, so $5,800 of that will be taxed at the parents' rate. The remaining $1,850 of taxable income comes from his part-time job, which is earned income and will be taxed at his own rate. Therefore, Yusef's taxable income will be divided between net unearned income of $5,800 and earned taxable income of $1,850.

Yusef,age 15,is a Dependent of His Parents