How the Kiddie Tax Catches Your Child's Investment Income

Lucas and Luna unpack the kiddie tax—a rule that taxes a child's unearned income above $2,800 at the parent's marginal rate, not the child's lower rate. They use a concrete example: a 14-year-old with $5,000 in dividend income from a custodial account. Lucas explains the $2,800 threshold for 2026, why the rule exists to prevent income shifting, and how it interacts with the new 2025 tax brackets after the TCJA sunset. Luna asks about UTMA accounts, Form 8615, and whether college savings plans are affected. They also cover the trust-tax-rate alternative for 2026 and a practical tip: timing dividend distributions or selling growth stocks after age 18. No prior tax knowledge assumed, but listeners will walk away knowing exactly how to check if their child owes kiddie tax this year. #KiddieTax #ChildInvestmentIncome #Form8615 #UTMA #CustodialAccount #2026TaxBrackets #TCJASunset #TrustTaxRates #UnearnedIncome #TaxPlanning #FamilyTaxStrategy #DividendTax #CapitalGains #Finance #TaxStrategy #FexingoBusiness #BusinessPodcast #LucasAndLuna Keep every episode free: buymeacoffee.com/fexingo