Anyone else got young adults in the house who are frustrated by the complexities of the tax code caused by covid despite their total income being less than $15K per year?
i have 2 (dependent) kids (19 and 21) who both had jobs while in college and qualified for some unemployment when covid closed their paces of work last year. They both received more than $2200 ....so have to complete form 8615 in their tax return to determine the rate at which their unemployment benefits will be taxed. Their tax return used to take a few minutes when it was one W2 with part-time income at a little over minimum wage. Now they need loads of information from their parents return....which they can't have yet as our taxes aren't done yet, and even need information from each other's return.
Surely this bit of the tax code is there to stop rich families reducing their tax bill by putting investments in the kids name, not to give those that don't earn much a hard time completing the tax return if they receive more than 2K in unemployment during a pandemic.
As the parent i also don't want my 19 and 21 year old kids to know all the stuff about our income that the IRS is asking them to provide. They don't need to know how much i earn (well apparently they do).
i see the issues with just having a default rate or option in that it would disproportionally help the kids of wealthy families but it would save a lot of hassle.......or they could just take unemployment benefit out of the list of things that count as unearned income during covid.
i have 2 (dependent) kids (19 and 21) who both had jobs while in college and qualified for some unemployment when covid closed their paces of work last year. They both received more than $2200 ....so have to complete form 8615 in their tax return to determine the rate at which their unemployment benefits will be taxed. Their tax return used to take a few minutes when it was one W2 with part-time income at a little over minimum wage. Now they need loads of information from their parents return....which they can't have yet as our taxes aren't done yet, and even need information from each other's return.
Surely this bit of the tax code is there to stop rich families reducing their tax bill by putting investments in the kids name, not to give those that don't earn much a hard time completing the tax return if they receive more than 2K in unemployment during a pandemic.
As the parent i also don't want my 19 and 21 year old kids to know all the stuff about our income that the IRS is asking them to provide. They don't need to know how much i earn (well apparently they do).
i see the issues with just having a default rate or option in that it would disproportionally help the kids of wealthy families but it would save a lot of hassle.......or they could just take unemployment benefit out of the list of things that count as unearned income during covid.