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Home > Question for a CPA... minor and taxes

Question for a CPA... minor and taxes

March 16th, 2017 at 04:15 pm

So, my daughter won a sweepstakes in 2016 valued at $5000. She turned 17 in 2016. She had no other income (no job or interest).

Does she need to file a tax return for that $5000?
Help?

Thanks!

4 Responses to “Question for a CPA... minor and taxes”

  1. Guppy Tender Says:
    1489684709

    Easy Answer-Phone a CPA that prepares taxes. Phone call costs nothing, and you get peace of mind.

  2. Dido Says:
    1489705218

    Yes! Welcome to the world of Kiddie Tax. See http://www.cpapracticeadvisor.com/news/11316614/what-unearned-income-means-on-a-dependents-income-tax-return

  3. Dido Says:
    1489754058

    Form 8615, First $1,050 is the child's standard deduction and non-taxable; second $1,050 is taxed at the child's tax rate based on their filing status (most likely $106--10% bracket--you would think it would be $105 but $106 is the tax table tax amount (which includes income from $1,050 to $1,075...that's why it's a bit higher than $105)--then the balance will be taxable at YOUR highest tax rate.

    Was there any withholding? $5,000 prize should most likely have had tax withheld already and your child might get a refund.

  4. PatientSaver Says:
    1489861922

    Is't it great we have our own resident CPA here to answer questions like this?

    Bummer about the taxes.

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