Why is Turbotax asking for form 8615?
For 2022, Form 8615 needs to be filed if all of the following conditions apply: The child has more than $2,300 in unearned income. The child is required to file a tax return. The child does not file a joint tax return with a spouse.
Is it better to itemize or take the standard deduction?
Add up your itemized deductions and compare the total to the standard deduction available for your filing status. If your itemized deductions are greater than the standard deduction, then itemizing makes sense for you. If youre below that threshold, then claiming the standard deduction makes more sense.
Why is it making me do Form 8615?
For children under age 18 and certain older children described below in Who Must File, unearned income over $2,300 is taxed at the parents rate if the parents rate is higher than the childs. If the childs unearned income is more than $2,300, use Form 8615 to figure the childs tax.
Can you avoid the kiddie tax?
A child can avoid the kiddie tax rules when the age, income, or support test (if applicable) is not met during the tax year. Reducing or eliminating a childs investment income by shifting to tax-free investments can minimize the impact of the kiddie tax or allow a child to avoid the kiddie tax rules.
Why can I not claim the American Opportunity credit?
To be eligible for AOTC, the student must: Be pursuing a degree or other recognized education credential. Be enrolled at least half time for at least one academic period* beginning in the tax year. Not have finished the first four years of higher education at the beginning of the tax year.
Who should use itemized deductions?
If the value of expenses that you can deduct is more than the standard deduction (as noted above, for the tax year 2022 these are: $12,950 for single and married filing separately, $25,900 for married filing jointly, and $19,400 for heads of households) then you should consider itemizing.
How can I avoid paying alternative minimum tax?
A good strategy for minimizing your AMT liability is to keep your adjusted gross income (AGI) as low as possible. Some options: Participate in a 401(k), 403(b), SARSEP, 457(b) plan, or SIMPLE IRA by making the maximum allowable salary deferral contributions.
Why do I owe alternative minimum tax?
The AMT is the excess of the tentative minimum tax over the regular tax. Thus, the AMT is owed only if the tentative minimum tax for the year is greater than the regular tax for that year. The tentative minimum tax is figured separately from the regular tax.
What is the maximum amount of the lifetime learning credit?
This credit can help pay for undergraduate, graduate and professional degree courses including courses to acquire or improve job skills. There is no limit on the number of years you can claim the credit. It is worth up to $2,000 per tax return.
How do you calculate the lifetime learning credit?
You calculate the lifetime learning credit by taking 20% of the first $10,000 of the qualified educational expenses you paid during the taxable year for all individuals. For a taxpayer with high modified adjusted gross income, a phaseout may apply.
