Kiddie Tax
Children who have unearned (generally investment) income greater than $2,100 may be subject to tax based on their
parents income. Since "kiddie tax" is computed by adding the child's investment income to the income of the parents, it is possible
that the child's income will be taxed at a higher rate than that of the parents. A child's unearned income is first reduced by a $1,050
standard deduction. $1,051 to $2,100 is taxed at the child's rate and the remainder is taxed at the parent's rate.
Student
Loan Deduction
In 2016 up to $2,500 of interest you pay on qualified higher education may be deductible - no matter how many
students. The phase out is $130,000/$160,000 MFJ and $65,000/$80,000. Married filing separate does not qualify for the
deduction.
State and Local Sales Tax Deduction
Taxpayers may elect to deduct state and local general sales and use
tax instead of state and local income tax.
