How the Kiddie Tax Works for Your Child's Investment Income

If your child has investment income from a custodial account, the kiddie tax might apply and it’s taxed at trust tax rates—not the child’s lower rate. In this episode, Lucas and Luna break down the 2026 thresholds (the first $1,300 is tax-free, next $1,300 at child’s rate, anything over at trust rates), who is affected (children under 19 and full-time students under 24), and three practical strategies to reduce the impact: switching to growth stocks, using municipal bonds, and timing the sale of assets. They also discuss a real-world case where a family inadvertently triggered the tax on a large capital gain distribution. If you have a child with a brokerage account, this episode is a must-listen for year-end tax planning. #KiddieTax #InvestmentIncome #TaxStrategy #FamilyFinance #IRS #TaxPlanning #CustodialAccounts #Dividends #CapitalGains #StandardDeduction #TrustTaxRates #Business #Finance #FexingoBusiness #BusinessPodcast #TaxPodcast #ParentingAndFinance #2026Tax Keep every episode free: buymeacoffee.com/fexingo