Investment
income of child under age 14. The
amount of taxable investment
income a child under age 14 can
have without it being subject to
tax at the parent's rate has
increased to $1,600 (previously
$1,500).
Introduction
This chapter discusses the
following two rules that may
affect the tax on certain
investment income of a child
under age 14.
If the child's
interest and dividend
income total less than
$8,000, the child's
parent may be able to
choose to include that
income (including
capital gain
distributions) on the
parent's return rather
than file a return for
the child. (See
Parent's Election To
Report Child's Interest
and Dividends, later.)
If the child's
interest, dividends, and
other investment income
total more than $1,600,
part of that income may
be taxed at the parent's
tax rate instead of the
child's tax rate. (See
Tax for Children
Under Age 14 Who Have
Investment Income of
More Than $1,600, later.)
For these rules, the term child
includes a legally adopted child
and a stepchild. These rules
apply whether or not the child
is a dependent.
These rules do not apply if:
The child is not
required to file a tax
return, or
Neither of the
child's parents were
living at the end of the
tax year.
Useful Items - You
may want to see:
Publication
929
Tax Rules for Children
and Dependents
Form
(and Instructions)
8615
Tax for Children Under
Age 14 With Investment
Income of More Than
$1,600
8814
Parents' Election To
Report Child's Interest
and Dividends
Which Parent's
Return To Use
If a child's parents are
married to each other and file a
joint return, use the joint
return to figure the tax on the
investment income of a child
under age 14. The tax rate and
other return information from
that return are used to figure
the child's tax as explained
later under
Tax
for Children Under Age 14 Who
Have Investment Income of More
Than $1,600.
Parents Who
Do Not File a
Joint Return
For parents who do not
file a joint return, the
following discussions
explain which parent's tax
return must be used to
figure the tax. Only the
parent whose tax return is
used can make the election
described under
Parent's Election To Report
Child's Interest and
Dividends.
Parents
are married. If
the child's parents file
separate returns, use
the return of the parent
with the greater taxable
income.
Parents not living
together. If
the child's parents are
married to each other
but not living together,
and the parent with whom
the child lives (the
custodial parent) is
considered unmarried,
use the return of the
custodial parent. If the
custodial parent is not
considered unmarried,
use the return of the
parent with the greater
taxable income.
For an explanation of
when a married person
living apart from his or
her spouse is considered
unmarried, see
Head of Household
in chapter
2.
Parents
are divorced. If
the child's parents are
divorced or legally
separated, and the
parent who had custody
of the child for the
greater part of the year
(the custodial parent)
has not remarried, use
the return of the
custodial parent.
Custodial parent
remarried. If
the custodial parent has
remarried, the
stepparent (rather than
the noncustodial parent)
is treated as the
child's other parent.
Therefore, if the
custodial parent and the
stepparent file a joint
return, use that joint
return. Do not use the
return of the
noncustodial parent.
If the custodial
parent and the
stepparent are married,
but file separate
returns, use the return
of the one with the
greater taxable income.
If the custodial parent
and the stepparent are
married but not living
together, the earlier
discussion under
Parents not living
together
applies.
Parents
never married. If
a child's parents did
not marry each other,
but lived together all
year, use the return of
the parent with the
greater taxable income.
If the parents did not
live together all year,
the rules explained
earlier under
Parents are divorced
apply.
Widowed
parent remarried.
If a widow or widower
remarries, the new
spouse is treated as the
child's other parent.
The rules explained
earlier under
Custodial parent
remarried
apply.
Parent's Election To
Report Child's
Interest and
Dividends
You may be able to elect to
include your child's interest
and dividend income (including
capital gain distributions) on
your tax return. If you do, your
child will not have to file a
return.
You can make this election
for 2004 only if all the
following conditions are met.
Your child was under
age 14 at the end of
2004. (A child born on
January 1,1991, is
considered to be age 14
at the end of 2004. You
cannot make the election
for this child.)
Your child is
required to file a
return for 2004, unless
you make this election.
Your child had
income only from
interest and dividends
(including capital gain
distributions and Alaska
Permanent Fund
dividends).
The dividend and
interest income was less
than $8,000.
No estimated tax
payment was made for
2004 and no 2003
overpayment was applied
to 2004 under your
child's name and social
security number.
No federal income
tax was taken out of
your child's income
under the backup
withholding rules.
You are the parent
whose return must be
used when applying the
special tax rules for
children under age 14.
(See
Which Parent's
Return To Use, earlier.)
These conditions are also
shown in Figure 33-A.
How to make
the election.
Make the election by
attaching Form 8814 to your
Form 1040 or Form 1040NR.
(If you make this election,
you cannot file Form 1040A
or Form 1040EZ.) Attach a
separate Form 8814 for each
child for whom you make the
election. You can make the
election for one or more
children and not for others.
Effect of
Making the
Election
The federal income tax on
your child's income may be
more if you make the Form
8814 election.
Rate
may be higher. If
your child received
qualified dividends or
capital gain
distributions, you may
pay up to $40 more tax
if you make this
election instead of
filing a separate tax
return for the child.
This is because the tax
rate on the child's
income between $800 and
$1,600 is 10% if you
make this election.
However, if you file a
separate return for the
child, the tax rate may
be as low as 5% because
of the preferential tax
rates for qualified
dividends and capital
gain distributions.
Deductions you cannot
take. By making
the Form 8814 election,
you cannot take any of
the following deductions
that the child would be
entitled to on his or
her return.
The higher
standard
deduction for a
blind child.
The
deduction for a
penalty on an
early withdrawal
of your child's
savings.
Itemized
deductions (such
as your child's
investment
expenses or
charitable
contributions).
Reduced
deductions or credits.
If you use Form 8814,
your increased adjusted
gross income may reduce
certain deductions or
credits on your return
including the following.
Deduction
for
contributions to
a traditional
individual
retirement
arrangement
(IRA).
Deduction
for student loan
interest.
Itemized
deductions for
medical
expenses,
casualty and
theft losses,
and certain
miscellaneous
expenses.
Total
itemized
deductions.
Personal
exemptions.
Credit for
child and
dependent care
expenses.
Child tax
credit.
Education
tax credits.
Earned
income credit.
Penalty
for underpayment of
estimated tax.
If you make this
election for 2004 and
did not have enough tax
withheld or pay enough
estimated tax to cover
the tax you owe, you may
be subject to a penalty.
If you plan to make this
election for 2005, you
may need to increase
your federal income tax
withholding or your
estimated tax payments
to avoid the penalty.
See chapter 5 for more
information.
Figure 33-A.
Can You
Include Your
Child's
Income On
Your Tax
Return?
Figuring
Child's Income
Use Part I of Form 8814
to figure your child's
interest and dividend income
to report on your return.
Only the amount over $1,600
is added to your income.
This amount is shown on line
6 of Form 8814. Include this
amount on line 21 of Form
1040 or Form 1040NR. Enter Form
8814 in the space
next to line 21. If you file
more than one Form 8814,
include the total amounts
from line 6 of all your
Forms 8814 on line 21.
Capital
gain distributions and
qualified dividends.
If your child's
dividend income included
any capital gain
distributions see
Capital gain
distributions
under
Figuring Child's
Income in
Part 2 of Publication
929. If your child's
dividend income included
any qualified dividends,
see
Qualified dividends
under
Figuring Child's
Income in
Part 2 of Publication
929.
Figuring
Additional Tax
Use Part II of Form 8814
to figure the tax on the
$1,600 of your child's
interest and dividends that
you do not include in your
income. This tax is added to
the tax figured on your
income.
This additional tax is
the smaller of:
10% Χ (your
child's gross income
- $800), or
$80.
Include the amount from
line 9 of all your Forms
8814 in the total on Form
1040, line 43, or Form
1040NR, line 40. Check box a
on Form 1040, line 43, or
Form 1040NR, line 40.
Illustrated
Example
David and Linda Parks are
married and will file
separate tax returns for
2004. Their only child,
Philip, is 8. Philip
received a Form 1099-INT
showing $3,240 taxable
interest income and a Form
1099-DIV showing $360
ordinary dividends. All the
dividends were qualified
dividends. His parents
decide to include that
income on one of their
returns so they will not
have to file a return for
Philip.
First, David and Linda
each figure their taxable
income (Form 1040, line 42)
without regard to Philip's
income. David's taxable
income is $41,700 and
Linda's is $59,300. Because
her taxable income is
greater, Linda can elect to
include Philip's income on
her return. See
Which Parent's Return To
Use, earlier.
On Form 8814 (see
illustrated form), Linda
enters her name and social
security number, then
Philip's name and social
security number. She enters
Philip's taxable interest
income, $3,240, on line 1a.
Philip had no tax-exempt
interest income, so she
leaves line 1b blank. She
enters Philip's ordinary
dividends, $360, on line 2.
Philip did not have any
capital gain distributions,
so she leaves line 3 blank.
Linda adds lines 1a and 2
and enters the result,
$3,600, on line 4. Because
Philip had qualified
dividends, Linda must use
the Child's Qualified
Dividends and Capital Gain
Distributions Worksheet to
figure the amount to enter
on line 6, instead of
subtracting line 5 from line
4. The amount she enters on
line 6 is $1,800, the amount
from line 11 of the
worksheet. On the dotted
line next to line 6, she
enters QD$200,
the amount from line 8 of
the worksheet. She includes
that amount ($200) on lines
9a and 9b of her Form 1040.
On the dotted line next to
lines 9a and 9b, she enters
Form
8814$200.
Linda includes $1,800 in
the total on line 21 of her
Form 1040 (not illustrated)
and in the space next to
that line enters Form
8814$1,800. Adding
that amount, plus the $200
of qualified dividends, to
her income increases each of
the amounts on lines 22, 36,
37, 40, and 42 of her Form
1040 by $2,000. Linda is not
claiming any deductions or
credits that are affected by
the increase to her income.
Therefore, her revised
taxable income on line 42 is
$61,300 ($59,300 + $200 +
$1,800).
On Form 8814, Linda
subtracts the $800 shown on
line 7 from the $3,600 on
line 4 and enters the
result, $2,800, on line 8.
Because that amount is not
less than $800, she enters
$80 on line 9. This is the
tax on the first $1,600 of
Philip's income, which Linda
did not have to add to her
income. She must add this
additional tax to the tax
figured on her revised
taxable income.
The tax on her $61,300
revised taxable income is
$12,150. She adds $80, and
enters the $12,230 total on
line 43 of Form 1040, and
checks box a.
Enter the amount
of qualified
dividends
included on
Form 8814, line
2
$360
2.
Enter the amount
from
Form 8814, line
3
0
3.
Enter the amount
from
Form 8814, line
4
3,600
4.
Divide line 1 by
line 3. Enter
the result as a
decimal
(rounded to at
least 3 places)
.100
5.
Divide line 2 by
line 3. Enter
the result as a
decimal
(rounded to at
least 3 places)
.000
6.
Base amount
$1,600
7.
Subtract line 6
from line 3
2,000
8.
Multiply line 7
by line 4.
Include this
amount on Form
1040, lines 9a
and 9b, or
Form 1040NR,
lines 10a and
10b. On the
dotted lines
next
to those lines,
enter Form
8814 and
this amount
(unless
you file
Schedule B (Form
1040); in that
case, follow the
instructions in
the
Note
on
this line).
Also, enter QD
(for
qualified
dividends)
and this
amount on the
dotted line next
to line 6 of
Form 8814. Note.
If this amount
plus the
parents'
dividends is
more
than $1,500,
report this
amount on
Schedule B
(Form 1040).
Show it as
from Form
8814
200
9.
Multiply line 7
by line 5.
Include this
amount on
Schedule D, line
13;
Form 1040, line
13, or
Form 1040NR,
line 14.
Enter Form
8814 and
this amount on
the
dotted line next
to line 13 of
Schedule D, or
in the
space to the
left of line 13
of Form 1040 or
line 14
of Form 1040NR.
Also, enter CGD
(for
capital
gain
distribution)
and this amount
on the
dotted line next
to line 6 of
Form 8814.
0
10.
Add lines 8 and
9
200
11.
Subtract line 10
from line 7.
Enter the result
here and on
Form 8814, line
6
1,800
Tax for Children
Under Age 14 Who
Have Investment
Income of More Than
$1,600
Part of a child's 2004
investment income may be subject
to tax at the parent's tax rate
if all of the following
statements are true.
The child was under
age 14 at the end of
2004. (A child born on
January 1, 1991, is
considered to be age 14
at the end of 2004. This
child's investment
income is not taxed at
the parent's rate.)
The child's
investment income was
more than $1,600.
The child is
required to file a
return for 2004.
These conditions are also
shown in Figure
33-B .
If neither parent was alive
on December 31, 2004, do not use
Form 8615. Instead, figure the
child's tax in the normal
manner.
If the parent does not or
cannot choose to include the
child's income on the parent's
return, use Form 8615 to figure
the child's tax. Attach the
completed form to the child's
Form 1040, Form 1040A, or Form
1040NR.
The following discussions
explain the parental information
needed for Form 8615 and the
steps to follow in figuring the
child's tax. Form 8615 is
illustrated later.
Providing
Parental
Information
(Form 8615,
lines AC)
On Form 8615, lines A and
B, enter the parent's name
and social security number.
(If the parents filed a
joint return, enter the name
and social security number
listed first on the joint
return.) On line C, check
the box for the parent's
filing status.
Figure 33-B.
Do You Have
To Use Form
8615 To
Figure Your
Child's Tax?
See
Which Parent's Return To Use
at the beginning of this
chapter for information on
which parent's return
information must be used on
Form 8615.
Parent with different
tax year.
If the parent and the
child do not have the
same tax year, complete
Form 8615 using the
information on the
parent's return for the
tax year that ends in
the child's tax year.
Parent's return
information not known
timely.
If the information
needed from the parent's
return is not known by
the time the child's
return is due (usually
April 15), you can file
the return using
estimates.
You can use any
reasonable estimate.
This includes using
information from last
year's return. If you
use an estimated amount
on Form 8615, enter Estimated
on the line next to the
amount.
When you get the
correct information,
file an amended return
on Form 1040X, Amended
U.S. Individual Income
Tax Return.
Instead of using
estimated information,
you may want to request
an extension of time to
file. Extensions are
discussed in chapter 1.
Step 1.
Figuring the
Child's Net
Investment
Income (Form
8615, Part I)
The first step in
figuring a child's tax using
Form 8615 is to figure the
child's net investment
income. To do that, use Form
8615, Part I.
Line 1
(investment income).
If the child had no
earned income, enter on
this line the adjusted
gross income shown on
the child's return.
Adjusted gross income is
shown on line 37 of Form
1040, line 22 of Form
1040A, or line 35 of
Form 1040NR. Form 1040EZ
and Form 1040NR-EZ
cannot be used if Form
8615 must be filed.
If the child had
earned income, figure
the amount to enter on
Form 8615, line 1, by
using the worksheet in
the instructions for the
form.
However, if the child
has excluded any foreign
earned income or
deducted either a loss
from self-employment or
a net operating loss
from another year, use
the Alternate Worksheet
for Line 1 of Form 8615
in Publication 929 to
figure the amount to
enter on Form 8615, line
1.
Investment income
defined.
Investment income is
generally all income
other than salaries,
wages, and other amounts
received as pay for work
actually done. It
includes taxable
interest, dividends,
capital gains (including
capital gain
distributions), the
taxable part of social
security and pension
payments, and certain
distributions from
trusts. Investment
income includes amounts
produced by assets the
child obtained with
earned income (such as
interest on a savings
account into which the
child deposited wages).
Nontaxable income.
For this purpose,
investment income
includes only amounts
that the child must
include in total income.
Nontaxable investment
income, such as
tax-exempt interest and
the nontaxable part of
social security and
pension payments, is not
included.
Income from property
received as a gift.
A child's investment
income includes all
income produced by
property belonging to
the child. This is true
even if the property was
transferred to the
child, regardless of
when the property was
transferred or purchased
or who transferred it.
A child's investment
income includes income
produced by property
given as a gift to the
child. This includes
gifts to the child from
grandparents or any
other person and gifts
made under the Uniform
Gift to Minors Act.
Example.
Amanda Black, age
13, received the
following income.
Dividends
$600
Wages
$2,100
Taxable
interest
$1,200
Tax-exempt
interest
$100
Net
capital
gains
$100.
The dividends
were on stock given
to her by her
grandparents.
Amanda's
investment income is
$1,900. This is the
total of the
dividends ($600),
taxable interest
($1,200), and net
capital gains
($100). Her wages
are earned (not
investment) income
because they are
received for work
actually done. Her
tax-exempt interest
is not included
because it is
nontaxable.
Trust income.
If a child is the
beneficiary of a trust,
distributions of taxable
interest, dividends,
capital gains, and other
investment income from
the trust are investment
income to the child.
Line 2
(deductions).
If the child does not
itemize deductions on
Schedule A (Form 1040 or
Form 1040NR), enter
$1,600 on line 2.
If the child does
itemize deductions,
enter on line 2 the
larger of:
$800 plus
the child's
itemized
deductions that
are directly
connected with
the production
of investment
income entered
on line 1, or
$1,600.
Directly connected.
Itemized deductions
are directly connected
with the production of
investment income if
they are for expenses
paid to produce or
collect taxable income
or to manage, conserve,
or maintain property
held for producing
income. These expenses
include custodian fees
and service charges,
service fees to collect
taxable interest and
dividends, and certain
investment counsel fees.
These expenses are
added to certain other
miscellaneous itemized
deductions on Schedule A
(Form 1040). Only the
amount greater than 2%
of the child's adjusted
gross income can be
deducted. See chapter 30
for more information.
Example 1.
Roger, age 12,
has investment
income of $8,000, no
other income, no
adjustments to
income, and itemized
deductions of $300
(net of the
2%-of-adjusted-gross-income
limit) that are
directly connected
with his investment
income. His adjusted
gross income is
$8,000, which is
entered on Form
1040, line 37, and
on Form 8615, line
1. Line 2 is $1,600
because that is more
than the sum of $800
and his
directly-connected
itemized deductions
of $300.
Example 2.
Eleanor, 8, has
investment income of
$16,000 and an early
withdrawal penalty
of $100. She has no
other income. She
has itemized
deductions of $1,050
(net of the
2%-of-adjusted-gross-income
limit) that are
directly connected
with the production
of her investment
income. Her adjusted
gross income,
entered on line 1,
is $15,900 ($16,000
- $100). The amount
on line 2 is $1,850.
This is the larger
of:
$800
plus the
$1,050 of
directly
connected
itemized
deductions,
or
$1,600.
Line 3.
Subtract line 2 from
line 1 and enter the
result on this line. If
zero or less, do not
complete the rest of the
form. However, you must
still attach Form 8615
to the child's tax
return. Figure the tax
on the child's taxable
income in the normal
manner.
Line 4
(child's taxable
income). Enter on
line 4 the child's
taxable income from Form
1040, line 42; Form
1040A, line 27; or Form
1040NR, line 39.
Line 5
(net investment income).
A child's net
investment income cannot
be more than his or her
taxable income. Enter on
line 5 the smaller of
line 3 or line 4 of Form
8615. This is the
child's net investment
income.
If zero or less, do
not complete the rest of
the form. However, you
must still attach Form
8615 to the child's tax
return. Figure the tax
on the child's taxable
income in the normal
manner.
Step 2.
Figuring
Tentative Tax at
the Parent's Tax
Rate (Form 8615,
Part II)
The next step in
completing Form 8615 is to
figure a tentative tax on
the child's net investment
income at the parent's tax
rate. The tentative tax at
the parent's tax rate is the
difference between the tax
on the parent's taxable
income figured with the
child's net investment
income (plus the net
investment income of any
other child whose Form 8615
includes the tax return
information of that parent)
and the tax figured without
it.
When figuring the
tentative tax at the
parent's tax rate, do not
refigure any of the
exclusions, deductions, or
credits on the parent's
return because of the
child's net investment
income. For example, do not
refigure the medical expense
deduction.
Figure the tentative tax
on Form 8615, lines 6
through 13.
Note.
If the child has any
capital gains or losses,
get Publication 929 for
help in completing Part
II of Form 8615.
Line 7
(net investment income
of other children).
If the tax return
information of the
parent is also used on
any other child's Form
8615, enter on line 7
the total of the amounts
from line 5 of all the
other children's Forms
8615. Do not include the
amount from line 5 of
the Form 8615 being
completed.
Example.
Paul and Jane
Persimmon have three
children, Sharon,
Jerry, and Mike, who
must attach Form
8615 to their tax
returns. The
children's net
investment income
amounts on line 5 of
their Forms 8615
are:
Sharon
$800
Jerry
$600
Mike
$1,000
Line 7 of
Sharon's Form 8615
will show $1,600
($600 + $1,000), the
total of the amounts
on line 5 of Jerry's
and Mike's Forms
8615.
Line 7 of Jerry's
Form 8615 will show
$1,800 ($800 +
$1,000).
Line 7 of Mike's
Form 8615 will show
$1,400 ($800 +
$600).
Other children's
information not
available. If
the net investment
income of the other
children is not
available when the
return is due, either
file the return using
estimates or get an
extension of time to
file. See
Parent's return
information not known
timely,
earlier.
Line 11
(tentative tax).
Subtract line 10 from
line 9 and enter the
result on this line.
This is the tentative
tax.
If line 7 is blank,
skip lines 12a and 12b
and enter the amount
from line 11 on line 13.
Lines
12a and 12b (dividing
the tentative tax).
If an amount is
entered on line 7,
divide the tentative tax
shown on line 11 among
the children according
to each child's share of
the total net investment
income. This is done on
lines 12a, 12b, and 13.
Add the amount on line 7
to the amount on line 5
and enter the total on
line 12a. Divide the
amount on line 5 by the
amount on line 12a and
enter the result as a
decimal on line 12b.
Example.
In the earlier
example under
Line 7 (net
investment income of
other children),
Sharon's
Form 8615 shows
$1,600 on line 7.
The amount entered
on line 12a is
$2,400, the total of
lines 5 and 7 ($800
+ $1,600). The
decimal on line 12b
is .333, figured as
follows and rounded
to three places.
Step 3.
Figuring the
Child's Tax
(Form 8615, Part
III)
The final step in
figuring a child's tax using
Form 8615 is to determine
the larger of:
The total of:
The
child's
share of the
tentative
tax based on
the parent's
tax rate,
plus
The tax
on the
child's
taxable
income in
excess of
net
investment
income,
figured at
the child's
tax rate, or
The tax on the
child's taxable
income, figured at
the child's tax
rate.
This is the child's tax.
It is figured on Form 8615,
lines 14 through 18.
Alternative minimum tax.
A child may be subject
to alternative minimum
tax (AMT) if he or she
has certain items given
preferential treatment
under the tax law. See
Alternative Minimum
Tax in
chapter 32.
For more information
on who is liable for AMT
and how to figure it,
get Form 6251. For
information on special
limits that apply to a
child who files Form
6251, Alternative
Minimum TaxIndividuals,
see
Alternative Minimum
Tax in
Publication 929.
Illustrated
Example
The following example
includes a completed Form
8615. Form 1040A is not
shown.
John and Laura Brown have
one child, Sara. She is 13
and has $2,800 taxable
interest income and $1,500
earned income. She does not
itemize deductions. John and
Laura file a joint return
with John's name and social
security number listed
first. They claim three
exemptions, including an
exemption for Sara, on their
return.
Because Sara is under age
14 and has more than $1,600
investment income, part of
her income may be subject to
tax at her parents' rate. A
completed Form 8615 must be
attached to her return.
Sara's father, John,
fills out Sara's return for
her.
John enters his name and
social security number on
Sara's Form 8615 because his
name and number are listed
first on the joint return he
and Laura are filing. He
checks the box for married
filing jointly.
He enters Sara's
investment income, $2,800,
on line 1. Sara does not
itemize deductions, so John
enters $1,600 on line 2. He
enters $1,200 ($2,800 -
$1,600) on line 3.
Sara's taxable income, as
shown on line 27 of her Form
1040A, is $2,550. This is
her total income ($4,300)
minus her standard deduction
($1,750). Her standard
deduction is limited to the
amount of her earned income
plus $250. John enters
$2,550 on line 4.
John compares lines 3 and
4 and enters the smaller
amount, $1,200, on line 5.
John enters $48,000 on
line 6. This is the taxable
income from line 42 of their
joint Form 1040 return. Sara
is an only child, so line 7
is blank. He adds line 5
($1,200), line 6 ($48,000),
and line 7 (blank), and
enters $49,200 on line 8.
Using the column for
married filing jointly in
the Tax Table, John finds
the tax on $49,200. He
enters the tax, $6,669, on
line 9. He enters $6,489 on
line 10. This is the tax
from line 43 of John and
Laura's Form 1040. He enters
$180 on line 11 ($6,669 -
$6,489).
Because line 7 is blank,
John skips lines 12a and 12b
and enters $180 on line 13.
John subtracts line 5
($1,200) from line 4
($2,550) and enters the
result, $1,350, on line 14.
Using the column for single
filing status in the Tax
Table, John finds the tax on
$1,350 and enters this tax,
$136, on line 15. He adds
lines 13 ($180) and 15
($136) and enters $316 on
line 16.
Using the column for
single filing status in the
Tax Table, John finds the
tax on $2,550 ( line 4) and
enters this tax, $256, on
line 17.
John compares lines 16
and 17 and enters the larger
amount, $316, on line 18 of
Sara's Form 8615. He also
enters that amount on line
28 of Sara's Form 1040A.
John also completes
Schedule 1 (Form 1040A) for
Sara.
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