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8615

Form 8815

Tax for Children under Age 18 with Investment Income of more than $1700.

If a child is under age 18 on December 31, 2006 having investment income of more than $1700, you must file Form 8615 and attach it to the child’s return.

If income of child is included in the return of Parent’s, for child under age 18 having investment income over $1700, is taxed at Parent’s rate even if Parent’s rate is higher than the child’s. So use form 8615 to figure the child’s tax if the child’s investment income is more than $1700.

Child’s Name and SSN:
The child’s name and SSN flow from the Main Information Worksheet. Enter on Main Information Worksheet child’s information including date of birth as it is required for the calculation in this form.

Line A and B:
Enter the Parent’s name and SSN here. If the child’s parents were married and filed a joint return, enter the name and SSN of the parent who is listed first on the joint return.

If the parents were married but filed separate returns, enter the name and SSN of the parent who had the higher taxable income.

If the parent’s were unmarried, treated as unmarried for federal income tax purposes, or separated by either a divorce or separate maintenance decree, enter the name and SSN of the parent with whom the child lived for most of the year.

Line C:
Check the filing status of parent’s as it was checked on the parent’s return.

Line 1:
This line represents the child’s investment income. The child’s investment income is equal to child’s adjusted gross income deducted by child’s earned income.

Earned Income: Earned income includes wages, tips and other payment received for professional services performed.

Here Adjusted Gross Income equals to

  • Line 38 of Form 1040,
  • Line 22 of Form 1040A, or
  • Line 36 of Form 1040NR.
  • And this amount is deducted by Earned income i.e.

  • Line 7, 12 and 18 of Form 1040,
  • Line 7 of Form 1040A, or
  • Line 8, 13, and 19 of Form 1040NR.
  • However, if child has a net loss from self-employment, files form 2555 or 2555-EZ and claims net operating loss deduction, then program will calculate the investment income by considering the loss. See the IRS instructions for more information.

    If the amount on this line is $1700 or less, then you are not eligible for filing this form.

    Line 2:
    If the child itemized deductions, the program will enter her the larger of:

  • $1700, or
  • $850 plus the portion of the amount on Line 28 of Schedule A (Form 1040), or Line 17 of Schedule A (Form 1040-NR).
  • Line 4:
    The amount on this line comes from

    1. Line 43, Form 1040,
    2. Line 27, Form 1040A,
    3. Line 40, Form 1040-NR.

    If the child files Form 2555 or 255-EZ to claim the foreign earned income or housing exclusion, then program transfers amount on this line from Line 7 of the Child’s Foreign Earned Income Tax Worksheet (Line 44 of Form 1040)

    Line 6:
    Enter the Parent’s taxable income from Line 43 Form 1040, line 27 Form 1040-A, line 6 Form 1040-EZ, or line 40 Form 1040NR.

    If the child files Form 2555 or 255-EZ then enter amount on this line from Line 7 of the Child’s Foreign Earned Income Tax Worksheet (Line 44 of Form 1040).

    If the amount is estimated select the estimated box.

    Line 7:
    Enter the total investment income from Line 5 of all other forms 8615, for all other children of the parent listed on line A.

    Line 9:
    The program calculates the tax on the amount on line 8 using the parent’s filing status entered on line c of this form.

    Line 10:
    Enter the Parent’s tax from Line 44 Form 1040, line 28 minus any AMT of Form 1040-A, line 11 Form 1040-EZ, or line 41 Form 1040NR.

    If the child files Form 2555 or 255-EZ then enter amount on this line from Line 7 of the Child’s Foreign Earned Income Tax Worksheet (Line 44 of Form 1040).

    If either Schedule D tax method or Schedule J tax method is used to figure the tax, then check the box on line 10.

    Line 15:
    The program calculates the tax on the amount on line 14 using the Child’s filing status entered on Main Information Worksheet.

    If either Schedule D tax method or Schedule J tax method is used to figure the tax, then check the box on line 14.

    Line 17:
    The program calculates the tax on the amount on line 4 using the Child’s filing status entered on Main Information Worksheet.

    If either Schedule D tax method or Schedule J tax method is used to figure the tax, then check the box on line 17.

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