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04/04/2006 06:11:49 PM · #1 |
YIKES - I don't know any accountants. Here is the question:
My son got inheritance money from his grandfather's estate in 2005 and all of the taxes were paid before the money was dispersed. We get a 1099 INT form the middle of March of this year (long past the required Jan. 31 mail date) that gives additional interest income of over 3,000 for 2005 not included in box 3, whatever that is.
Now - he is 18, a student, and only made $1700 last year. Does he have to pay taxes on this additional interest? I don't understand all this legal jibberish and tax-ese!!
THANKS
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04/04/2006 06:17:52 PM · #2 |
He has to claim it on his return, yes. But he'll still be well under the standard deductable, so he isn't going to have to pay taxes on it...
But I'm not an accountant... just a wayward business student... =] Somebody want to back me up? =] |
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04/04/2006 06:18:53 PM · #3 |
| I'm not an accountant - but do my own and many family members taxes. What I would do is file an amended return and include the income. Interest income is taxable. And combined with the income you stated he made this would put him into the catagory of someone who has to file (unless you included his income in your taxes). It's better to be safe than sorry when it comes to the IRS. I always buy TaxCut from Staples (or any office supply store). You can do as many returns as you want on it. My daughter is 17 and even though I claim her, I have her file her own tax return for her part time job. Hope this helps. |
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04/04/2006 06:21:20 PM · #4 |
Probably has to pay taxes - that is always the safe assumption. The first time I had to pay taxes I was 18 and a student - I couldn't even use the 1040EZ form because, like your son, my income was pretty much all from interest.
The main factor - will your son be claimed as a dependent on somebody else's tax form? That will change the amount of his deduction.
I would expect that some of the tax preparation software would do a good job figuring this out. But of course talking to a lawyer instead of an amature photographer would be wise... |
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04/04/2006 06:25:51 PM · #5 |
Post the question on www.fairmark.com (see the board section). I suspect you have the right answer but this can be a complex area and if you ain't going the accountant or software path then at least hit a board full of accountants with the question.
Not that this is a bad board but I suspect any photo related questions posted at fairmark might be more fully answered here and visa versa :-)) |
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