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Subject Author Date
any advantage to filing 8814? David Zelinsky 04-04-2008
Posted by David Zelinsky on April 4, 2008, 8:25 pm
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 I've seen a list of disadvantages to filing a dependent's taxes on the
parents' return with form 8814, versus filing a separate return for
the child. Is there ever any financial _advantage_ to doing this? Or
is it merely a convenience which sometimes incurs extra cost?

I'm particularly interested in this question in light of the new
economic stimulus rebates. Does filing the child's taxes on the
parents' return affect whether the child can receive a stimulus
payment?

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Posted by Ernie Klein on April 4, 2008, 10:55 pm
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> Does filing the child's taxes on the
> parents' return affect whether the child can receive a stimulus
> payment?

No it doesn't, because a child (or anyone else who is a dependent)
cannot receive a stimulus payment at all.

--
-Ernie-

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Posted by Harlan Lunsford on April 5, 2008, 1:42 pm
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David Zelinsky wrote:
> I've seen a list of disadvantages to filing a dependent's taxes on the
> parents' return with form 8814, versus filing a separate return for
> the child. Is there ever any financial _advantage_ to doing this? Or
> is it merely a convenience which sometimes incurs extra cost?
>
> I'm particularly interested in this question in light of the new
> economic stimulus rebates. Does filing the child's taxes on the
> parents' return affect whether the child can receive a stimulus
> payment?
>
Stimulus rebate considerations aside, though, I still prefer/recommend
that a separate return be prepared for each child affected, so that said
child can sign the return with the opportunity for parents to explain
what that income tax return is all about. It's never too early to try
to teach a kid a little something about the income tax system, esp the
lesson that the reason to file a return is NOT just to get a refund.

ChEAr$,
Harlan Lunsford, EA n LA

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Mark Bole on April 5, 2008, 10:57 pm
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Harlan Lunsford wrote:
> David Zelinsky wrote:
>> I've seen a list of disadvantages to filing a dependent's taxes on the
>> parents' return with form 8814, versus filing a separate return for
>> the child. Is there ever any financial _advantage_ to doing this? Or
>> is it merely a convenience which sometimes incurs extra cost?
[...]
> Stimulus rebate considerations aside, though, I still prefer/recommend
> that a separate return be prepared for each child affected, so that said
> child can sign the return with the opportunity for parents to explain
> what that income tax return is all about.

I second Harlan's recommendation. I still remember filling out a
Schedule D by hand when I was a teenager, with every single dividend
reinvestment of some marginal mutual fund carefully documented...must
have been two or three hand-written pages I sent to the IRS!

To answer the OP's question: no, there is never a *tax* advantage to
filing child's investment income on the parents' return....but there
might be an advantage due to perceived transaction cost of doing it
yourself vs. forcing your kids to do it.

-Mark Bole

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Ira Smilovitz on April 6, 2008, 12:46 pm
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> I've seen a list of disadvantages to filing a dependent's taxes on the
> parents' return with form 8814, versus filing a separate return for
> the child. Is there ever any financial _advantage_ to doing this? Or
> is it merely a convenience which sometimes incurs extra cost?
>
> I'm particularly interested in this question in light of the new
> economic stimulus rebates. Does filing the child's taxes on the
> parents' return affect whether the child can receive a stimulus
> payment?

As others have already mentioned, there's no impact on the stimulus payment.
One additional non-financial "advantage" to filing on the parents' return
that I have heard is that doing so avoids having to disclose the amount of
the parents' income to the child.

Ira Smilovitz

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

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