Orem, UT (PRWEB) November 02, 2013
A new article explains how the "Kiddie Tax" was legislated to tax the unearned income of a child at the parent’s marginal rate. It was established as a way to stop income shifting tax strategies and transfer money from wealthy Americans. Shifting income has traditionally been a way to lower the income and thereby the tax for Americans. The kiddie tax was established to help prevent this strategy. While the kiddie tax has reduced the effectiveness of this strategy, it has not altogether stopped income shifting. In this article, Attorney Lee Phillips explains how the kiddie tax works and how to still get some benefits.
Mr. Lee Phillips, an asset protection and business-structuring attorney states, “Shifting income is just plain smart. In today’s high tax environment, you get an additional bonus by shifting income, which results in lowering your adjusted gross income or AGI. Under new tax laws, having a lower AGI is a big deal.”
The “kiddie tax” was passed by Congress some time ago to stop parents from shifting income to the children to take advantage of their lower tax rates. The kiddie tax is only imposed on unearned income, not earned income. The kiddie tax applies to any unearned income for kids up to 18 years of age, unless the child is a student and Mom and Dad claim the child on their tax return as a dependent. Then the age jumps to 24 years old.
Mr. Phillips serves as a counselor to the Supreme Court of the United States. He is the author of 11 books, including his latest book, Protecting Your Financial Future. He has written hundreds of articles for professional people assisting them in finding various strategies to use the law to protect their property, save taxes and make additional money. He is an asset protection, tax planning and entity structuring attorney who has given addresses to thousands business seminars. He enjoys helping other people apply the law, not only to provide asset protection and estate planning, but to use it to structure businesses and save taxes, helping individuals reach new financial heights.
LegaLees was founded in 1982 by Lee R. Phillips. It is a legal self-help publishing company. It produces products designed to help people understand the law. Because of personal experiences, Mr. Phillips realized that people needed to be able to understand how the law works so they can direct their own legal professionals. He also saw that people who want to do their own legal work need to be shown how, not just handed a fill in the blank form. LegaLees has designed many products to help individuals structure their personal and business affairs. All of the products help the end users protect assets and prevent legal disasters that can strike at any time.