I have a 13 year old and a 10 year old. I opened an UGMA account for each of them when they were born. Both have 2 mutual funds invested in and they have appreciated over the years. As my 13 year old's account approaching 6 figure, I noticed that the dividends, distribution, and interests that I have been included in my own tax return will likely be around $5000 to $6000 for her account. I am paying roughly $1500 tax for that judging my effective tax rate was 28% last year.Can I begin to file separate tax return for my 13 year old, or even my 10 year old? This would be their only source of income this year. I would assume that I could save some tax by doing that.Any advice?
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