What's the best way to go about filling taxes for my kid's UTMA accounts? They each have dividends and capital gains (from tax gain harvesting). I was told they each need their own return filled, and my tax preparer is willing to do it for $75 each. Should I just do that? (Turbotax charges $99 if there's capital gains from selling stock)

@mysterious-tomato-10057 is the state return free too? And it seems like this is for fillers with AGI under 89k

yup you are right. not seeing anything better than 16$

Oh good point, it probably is for the minor. So I guess it boils down to who much they'd charge for the state return. I think I'll just pay the $16. Thanks

I've been doing tax gain harvesting with UTMA accounts for years and I never file returns for my kids. Seems it's a gray area. Worst case you'll get a notice that you need to file.

Those numbers are outdated. The current "standard deduction" for kids (in UTMA accounts) is $1350, and the next $1350 is taxed at the childs tax rate - which is 0% if they don't have any income... After the first $2700 it's taxed at the parents marginal tax rate. Didn't seem like filing for under $2700 is a grey area based on my limited research. Everyone / everywhere seems to say it's required. @melodic-restaurant-25257 do you mind explaining why you feel it's a grey area?

If less than $13,500 it can be filed on the parents return form 8814 if more than $13,500 the child has to file a separate return

@incalculable-electrician-51702 I saw that too, but not capital gains from selling stock

@lemon-processor-41847 looks like you are correct, over $1,350 in unearned income you are supposed to file a tax return.

What needs to be filed? Form 8615?

@incalculable-electrician-51702 isn't form 8615 for above the $2700? It applies the parents' higher marginal tax rate to that income. It's attached to the child's return. (under $2700 there's no kiddie tax so that shouldn't be necessary, just a regular return I suppose)

Do we have a Tax expert here?

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Agreed probably not worth the hassle if you need to file for each child. I would keep the gains under $1350 to avoid having to file.

If gains under $1,350 don't file. Even under the full $2,700 most tax accountants will tell you don't bother. Important distinction to note - Form 8814 has no option to report capital gains - only capital gains distributions. So if you tax gain harvest a large amount, there are actual capital gains, and that option is no longer.

@hallowed-air-46987 Can you please explain "Even under the full $2,700 most tax accountants will tell you don't bother." Why is that? Is it because if you don't owe anything the IRS generally turns a blind eye?

Yes, since if you were to file you would owe nothing. And since there would be no tax due, there's no potential failure to file penalty. This is my understanding, it's quite difficult to find exact guidance from the IRS.

This is very food to know. 2 other accountants just told me the same thing. Thank you

Sure