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| *Ostroff, Fair and Company>>>Australia Taxes |
Can under 18 year olds get taxed if they earn interest in a savings account? |
Can under 18 year olds get taxed if they earn interest in a savings account? My 7 month old is being taxed on the interest in her savings. Yes, it is possible, but you have to earn a decent amount. Depdends on how much you earn. I think if it's under $300, you are ok. If they earn interest from a savings accont, I don't think they can be taxed. I know I don't remember ever being taxed for the interest earned in my savings account. It may be possible, but unlikely unless you earn alot or have a job. The amount would have to be quite high, so it's unlikely there's a need to worry about it, unless they also work and have to file a tax return, in which case interest earned on savings is supposed to be declared. At the end of the year, the bank will send you a 1099 showing the amount of interest. You will need to report that income because IRS keeps track of all 1099. (It doesn't mean you owe tax though). However, if you are under 18, you are probably treated as a dependent of your parents and the amount on 1099 should be included in your parents' income. Also, you may even have your parents as co-holders of your account. In short, it's unlikely you have to come up with moeny on your own to pay tax on the interest from your savings account. yeah they can. but the tax free threshhold is $6,000 so you'd have to earn over $6,000 in interest to be taxed. |
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