PARENTS WITH CHILDREN UNDER THE AGE OF 14

For those of us with children you might think about opening Investment / Savings accounts in the child's Social Security Number. For tax year 2003, children under 14 years are not taxed on the first $750 of interest, dividends or capital gains earned during the tax year. The next $750 of income is only taxed at the 10% tax rate. Any amounts over $1,500 of income are taxed at the parents' marginal tax rate. For Parents in the 28% marginal rate that is a tax savings of over $340 in taxes for the year 2003. This tax saving could increase in future years due to adjustments for inflation.

As a parent you may be able to avoid having to file a tax return for your child by including the child's income on your tax return. You can choose to do this if all of the following conditions are met:

Your child was under age 14 at the end of your tax year,
Your child had income only from interest, dividends, and capital gains,
The interest and dividend income was less than $7,500,
No estimated tax payments were made in the child's name, and
No federal income tax was withheld from the child's income under backup withholding.

To make this choice, attach Form 8814, Parent's Election to Report Child's Interest and Dividends, to your Form 1040.

Please feel free to call so we can discuss your particular tax situation.

The information set forth herein was obtained from sources that I believe reliable, but I do not guarantee its accuracy.

IMPORTANT DOWNLOADS
Charitable Contributions
Energy Efficientcy Home Credit
Tax Rate Schedule 2007
Household Employees
Tax Cheat Sheet

CLIENT TESTIMONIALS
"I already have a full-time job, and it has nothing to do with the peculiarities of tax law. I rely on Brian to save me money.
The first year I went to him, he looked at
the return I had filed the previous year and found mistakes. We filed an amended return and I received some of my money back. Why pay taxes if you aren't
required to?"

A.M. – Seattle, WA

COMMON QUESTIONS
What is the status of my refund?
Contact the IRS Refund Hotline at 800-829-1954 or on the web at http://www.irs.gov click the "Where's my refund?" link.

The taxpayer will need: their Social Security Number (SSN); the filing status of the return you are calling about; the exact refund amount as reported on the originally filed tax return.

Phone: 253.831.5009 | Fax: 206.577.5322 | email: taxinfo@brianberlage.com | 34518 5th Place SW • Federal Way, WA 98023
copyright © 2006 Brian Berlage CPA Accounting Solutions PLLC. All rights reserved.