Kiddie Tax
Scenarios
One
Two
Three
Unearned income
$3,100
$ 800
$ 3,500
Earned income
0
800
13,200
Total
$3,100
$1,600
$16,700
Less: Standard deduction
(1,150)
(1,200)
(12,950)
Taxable income
$1,950
$ 400
$ 3,750
Taxed at Parent’s rate (Unearned income>$2,300)
$ 800
0
$ 1,200
Taxed at Child’s rate
$1,150
$ 400
$ 2,550
How did they get the Parent's rate and Child's rate numbers. I understand that it will be having a parent's rate if it exceeds 2300 in unearned income, but how did they calculate the numbers of 800/1150 and 1200/2550?