My daughters received their forms 1099-INT for their “Little Savers” accounts at our local bank last week. Since they are under the age of 16, we must report their income on our personal income tax returns (the infamous “Kiddie Tax”). The tax policy rationale is that wealthy parents should not be able to shift income to their children and pay at lower rates, which kind of makes sense. But how many children are really earning income as a result of a clever tax scheme? I suspect many are, just like my kids, simply the beneficiaries of the occasional savings bonds from Oma and Opa, together with some potty money. So, today’s Fix The Tax Code Friday question is:
Should children be allowed to file their own tax returns and pay at their own rates?
