InvestmentNews Quotes Beth Kaufman on How Changes to 'Kiddie Tax' Will Impact Families
The new federal tax law made changes to the so-called "kiddie tax" that could impact how some advisers handle their clients' financial plans.
While experts say lawmakers largely simplified the kiddie tax, the changes may change how some clients finance a child's college education and, in rare circumstances, cause some low- to middle-income families to pay more in tax.
"That will be a pretty unusual situation, where a kid with substantial unearned income has parents in a lower tax bracket," she said.
Overall, Ms. Kaufman thinks the new rules simplify the tax calculation for many families. Now, the same kiddie-tax rates apply to all children, instead of having varying rates based on parents' income.
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Excerpt taken from the article “Tax Law: Why Changes to the Kiddie Tax Are a 'Big Deal' for Advisers” by Greg Iacurci for InvestmentNews.