How the Kiddie Tax Works in 2026

Lucas and Luna unpack the kiddie tax — the rule that taxes a child's unearned income at the parent's marginal rate. They explain the 2026 thresholds, who it actually applies to, and why the IRS tightened it to stop wealthy families from shifting investment income to kids. Using a concrete example of a family with a $12,000 dividend portfolio in a child's name, they show how the first $1,300 is tax-free, the next $1,300 is taxed at the child's rate, and anything above that gets hit with the parent's top bracket. They also cover practical workarounds like 529 plans, Roth IRAs, and custodial accounts structured wisely. The episode is a clear, numbers-driven guide for parents, grandparents, and anyone managing a child's investment account. #KiddieTax #ChildTax #InvestmentIncome #TaxPlanning #FamilyFinance #CustodialAccounts #2026Taxes #TaxStrategy #TaxDeductions #Finance #PersonalFinance #TaxTips #WealthTransfer #ParentingAndMoney #TaxLaw #IRS #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo