Instructions for Filling Out Form 8615

Instructions for Filling Out Form 8615

Written by 
Pilot Team
June 9, 2023
Instructions for Filling Out Form 8615

This document offers comprehensive guidance on completing Form 8615 for tax year 2023, which is used to calculate taxes for certain children with unearned income. It covers eligibility criteria, form purpose, and specific line-by-line instructions.

In this article, we'll provide essential information on Form 8615 and a step-by-step guide on how to fill it out accurately and efficiently.

What is Form 8615?

Form 8615 is a tax document used to calculate the tax liability for certain children who have unearned income exceeding $2,500. This form is necessary for children under the age of 18 and some older children whose parents' tax rate is higher than the child's. By completing Form 8615, the child's net unearned income is added to the parents' income, and the parents' tax rate is applied to the combined amount. This process ensures that the appropriate tax rate is used for the child's unearned income, preventing potential tax avoidance strategies.

Who Must File Form 8615?

Form 8615 must be filed for a child who meets all of the following conditions: (1) they had more than $2,500 of unearned income, (2) they are required to file a tax return, (3) they were either under age 18 at the end of 2023, age 18 with earned income less than half of their support, or a full-time student aged 19 to 23 with earned income less than half of their support, (4) at least one parent was alive at the end of 2023, and (5) the child doesn't file a joint return for 2023.

Form 8615 Tax Filing Deadlines and Due Dates

  • Typically due on annual Tax Day, usually April 15th
  • If due date falls on a weekend or holiday, extended to the next business day
  • Consult the IRS website or a tax professional for accurate and up-to-date information

Form 8615 Late Payment Penalty

If you fail to pay the tax due on Form 8615 by the deadline, you may be subject to a late payment penalty. The penalty is typically 0.5% of the unpaid tax for each month or part of a month the tax remains unpaid, up to a maximum of 25%. To avoid this penalty, it's crucial to file your taxes on time and pay any taxes owed by the due date.

Step-by-Step Instructions for Form 8615

Following the instructions provided by the IRS, here are the step-by-step instructions for filling out Form 8615:

  1. Introductory Material: Review the overview of the form and its purpose, as well as any reminders and future developments.
  2. General Instructions: Determine if the child must file the form, understand the purpose of the form, identify what constitutes unearned income, and decide which parent's return to use.
  3. Specific Instructions: Proceed with filling out each line of the form, including:
  • Calculating the child's unearned income
  • Determining the parent's tax rate
  • Calculating the child's tax

Please note that the actual form filling process is complex and requires detailed tax information from both the child and the parent(s). It is recommended to consult with a tax professional or use tax preparation software to ensure accuracy.

How to Submit Form 8615

To submit Form 8615, first fill out the required information, including the child's name, social security number, and filing status. Calculate the child's unearned income, taxable income, and net unearned income, and enter these values on the appropriate lines. Figure a tentative tax at the parent's tax rate, calculate the child's tax, and enter the final value on line 18.

Finally, attach Form 8615 to the child's tax return. Keep in mind that the form must be filed for any child who meets the specified conditions, and the tax return of the parent with the higher taxable income should be used if the child's parents file separate returns. Additionally, the child's tax may need to be refigured if the parents' income changes after the child's return is filed, and the child may be subject to Alternative Minimum Tax (AMT) in certain cases.

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