Special tax rules may apply to some children who receive investment income. The rules may affect the amount of tax and how to report the income. Here are five key points to keep in mind if your child has investment income:

  1. Investment Income. Investment income generally includes interest, dividends and capital gains. It also includes other unearned income, such as from a trust.
  2. Parent's Tax Rate. If your child's total investment income is more than $2,000 then your tax rate may apply to part of that income instead of your child's tax rate. See the instructions for Form 8615, Tax for Certain Children Who Have Unearned Income.
  3. Parent's Return. You may be able to include your child's investment income on your tax return if it was less than $10,000 for the year. If you make this choice, then your child will not have to file his or her own return. See Form 8814, Parents' Election to Report Child's Interest and Dividends, for more.
  4. Child's Return. If your child's investment income was $10,000 or more in 2014 then the child must file their own return. File Form 8615 with the child's federal tax return.
  5. Net Investment Income Tax. Your child may be subject to the Net Investment Income Tax if they must file Form 8615. Use Form 8960, Net Investment Income Tax, to figure this tax. For more on this topic, visit IRS.gov.

Refer to IRS Publication 929, Tax Rules for Children and Dependents, for complete details on this topic.

TaxAct Free Federal Edition will guide you step-by-step through all investment tax topics. Answer simple questions and TaxAct will complete your IRS forms, including Forms 8615 and 8960. Start your TaxAct Free Edition return now to file your federal taxes free!

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September 2017
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Upcoming Tax Dates

September 5 — Everyone
Federal Holiday (Labor Day) Details

September 10 — Communications and air transportation taxes under the alternative method.
Deposit the tax included in amounts billed or tickets sold during the first 15 days of August.

September 11 — Employees who work for tips
If you received $20 or more in tips during August, report them to your employer Details

September 14 — Regular method taxes
Deposit the tax included in amounts billed or tickets sold during the last 16 days of August.

September 15 — Individuals
Make a payment of your 2017 estimated tax if you are not paying your income tax for the year through withholding (or will not pay in enough tax that way). Use Form 1040-ES. This is the third installment Details

September 15 — S Corporations
File a 2016 calendar year income tax return (Form 1120S) and pay any tax due. This due date applies only if you timely requested an automatic 6-month extension Details

September 15 — Partnerships
File a 2016 calendar year return (Form 1065). This due date applies only if you were given an additional 5-month extension Details

September 15 — Corporations
Deposit the third installment of estimated income tax for 2016 Details

September 15 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in August.

September 15 — Nonpayroll withholding
If the monthly deposit rule applies, deposit the tax for payments in August.

September 27 — Communications and air transportation taxes under the alternative method.
Deposit the tax included in amounts billed or tickets sold during the last 16 days of August.

September 29 — Regular method taxes
Deposit the tax for the first 15 days of September.

September 29 — Regular method taxes (special September deposit rule)
Deposit the tax for the period beginning September 16 and ending September 26.

September 29 — Communications and air transportation taxes under the alternative method (special September deposit rule).
Deposit the tax included in amounts billed or tickets sold during the period beginning September 1 and ending September 11.

September 30 — Wagering tax
File Form 730 and pay the tax on wagers accepted during August.

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