Shoulod I file a return for my 3-month-old? — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Shoulod I file a return for my 3-month-old?

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Q. My daughter was born in October. We put some money and mutual funds in her name, so she’ll have to report taxable income. Will I have to file a complete tax return for her? J.P., Bellevue, Wash.

A. You generally have to file tax returns for a dependent child only if her taxable unearned income reaches above $800 for 2005 ($850 for 2006). But you can also elect to report the child’s income on your own return by filing Form 8814 (Parents’ Election to Report Child’s Interest and Dividends). That privilege costs you either $80 or 10 percent of the child’s taxable income (if above $800). Tip: If the child’s unearned income exceeds $1,600 ($1,700 for 2006), the excess is taxed at your top tax rate under the “kiddie tax” rules.

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