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Subject:  Re: UTMA taxes vs parental safe harbor? Date:  3/28/2000  6:10 AM
Author:  TMFExRO Number:  32759 of 127846

<< My kids have UTMA accounts which collectively generate just enough dividends to trigger the kiddie tax. Since neither one has found a job yet (some lame excuse about learning to read & write first), neither has W-2 income to manipulate withholding to avoid estimated taxes. >>

Kids today! What a lame excuse for not having a job. Why, in my day....

<< What, if any, is the relationship between my safe harbor WRT estimated taxes & their tax liability? Can the little tricycle motors piggyback onto Dad's W-2 safe harbor or am I going to have to find a Dickensian sweatshop for them to work in? Does anybody have Kathie Lee's number?

My understanding is that the threshold for the penalty to kick in is taxes >$1K. Is that a separate grand for each kid, plus me & the missus (MFJ) or what? >>

Since you're filing returns for them, they have their own ES requirements. As long as their individual tax is under $1,000, you don't need to worry about ES payments. When you get past that, it looks like you're stuck with ES payments until you can put them to work.

Phil Marti

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