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Kid Tax
Term category: Taxes
In 10 words or less: A tax assessed to kids under 14 who earn greater than $1200.

Definition: A tax applied to any income a child under the age of 14 receives in excess of $1200. The income earned over this level is taxed at the parent's rate.

More Details: If a child under the age of 14 earns over $1200/year in income, they are obligated to pay taxes on it. However, since kids can't work at this age, most of the time this income comes from dividends, bond interest, or a hobby business they might own.

Good ol' Uncle Sam...

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Taxes 2006 for Dummies by Eric Tyson
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