Tax Rules For Children And Dependents (2001) - Department Of The Treasury
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26Publication 929
Contents
Cat. No. 64349Y
Important Changes . . . . . . . . . . . . . . . . 1
Department
Tax Rules for
of the
Important Reminders . . . . . . . . . . . . . . 2
Treasury
Children and
Internal
Introduction . . . . . . . . . . . . . . . . . . . . . 2
Revenue
Part 1. Rules for All Dependents . . . . . . 2
Service
Dependents
Filing Requirements . . . . . . . . . . . . . 2
Who Should File? . . . . . . . . . . . . . . . 4
Responsibility for Child’s Return . . . . . 4
Standard Deduction . . . . . . . . . . . . . 5
Dependent’s Own Exemption . . . . . . . 5
For use in preparing
Withholding From Wages . . . . . . . . . 5
2001
Part 2. Tax on Investment Income
Returns
of Child Under 14 . . . . . . . . . . . . . . 6
Parent’s Election To Report
Child’s Interest and
Dividends . . . . . . . . . . . . . . . . . 6
Tax for Children Under Age 14
Who Have Investment
Income of More Than $1,500 . . . . 10
Glossary . . . . . . . . . . . . . . . . . . . . . . . 24
How To Get Tax Help . . . . . . . . . . . . . . 25
Index . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Important Changes
Filing requirements. The amount of gross in-
come that many dependents with earned in-
come (wages, tips, etc.) can have during the
year without having to file a return has in-
creased. See Filing Requirements in Part 1.
Standard deduction. The standard deduction
for many dependents with earned income
(wages, tips, etc.) has increased. See Standard
Deduction in Part 1.
Tax computation for certain dependents.
Generally, the tax computed for a dependent
using the 2001 Tax Table or Tax Rate Sched-
ules can be reduced to take into account the
new 10% tax rate. To figure the reduced tax, use
the Tax Computation Worksheet for Certain De-
pendents in the instructions for Form 1040 (line
40), Form 1040A (line 26), or Form 1040EZ (line
11).
This computation does not apply to the
following.
•
Dependents who received (before any off-
sets) an advance payment of their 2001
taxes.
•
Dependents who file Form 1040NR, U.S.
Nonresident Alien Income Tax Return.
Alternative minimum tax. The limit on the
exemption amount for figuring the alternative
minimum tax of a child filing Form 8615 has
increased to the child’s earned income plus
$5,350. See Alternative Minimum Tax in Part 2.
Third party designee. Beginning with the
2001 tax return, a child’s parent or guardian who
does not sign the child’s return may be author-
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