Small Business Tax Savings Podcast Kiddie Tax Explained: A Comprehensive Guide for Parents
How can you save money with the “Kiddie Tax”? In this episode of the Small Business Tax Savings Podcast, Mike discusses strategies for reducing or avoiding the Kiddie Tax. He explains when it applies and what investments can be used to keep unearned income low.
Mike provides tips on filing form 8615, investing in Series EE, saving bonds, and more.
Tune in now and listen as Mike shares his goal to ensure you are paying the lowest amount in taxes as legally possible!
[00:24] Strategies To Minimize Unearned Income Tax For Minors
- Today’s topic is, “How can you take advantage of the Kiddie Tax”
- What is a “Kiddie Tax”?
[01:21] 4 Primary Criteria Of Kiddie Tax
- People were investing in stocks, interest, and dividends in their child’s name to take advantage of lower tax brackets
- Four primary criteria for when the kiddie tax comes into play
- Stay below the threshold to avoid Kiddie Tax
- Choose investments that yield minimal or no dividends
[05:36] Minimize Kiddie Tax And Take Advantage Of Investment Opportunities
- Utilize a Section 529 plan for tax-exempt withdrawals
- Invest in life insurance products with tax-deferred growth
- Where can you apply “Kiddie Tax”?
- What are ways to avoid the “Kiddie Tax”?
[08:02] Closing Segment
- Mike shares his goal to ensure you are paying the lowest amount in taxes as legally possible!
- Final Words
Key Quotes
“Stay below the threshold. Simply put, if the unearned income of your child is under the annual threshold. No “Kiddie Tax” applies, nothing to worry about there.” – Mike Jesowshek, CPA
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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast
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