Son's Tax Return, Investment Income, CSS and FAFSA

Paying for College
1

<p>Hello I hope somebody can answer my question, so I can get all these forms filled out right the first time. </p>

<p>My son has about $4500/year of self employment/independent contractor income.<br>
He also has some investments in a UTMA account w/ dividend income (very minor < $50). </p>

<p>Does he have to claim the investment income on his taxes? The only IRS documents I can find say that he only has to claim investment income if it is over $1600. But it is not clear to me if that is the case when the kid also has earned income. </p>

<p>Where do we report his assets (in the UTMA account) on the CSS Profile and FAFSA?</p>

<p>Thanks!</p>

2

<p>Yes he has to claim UTMA dividends on his taxes (Schedule B), but since his first $950 in investment income is tax-free, there will be no tax assessed on it.</p>

<p>You report the value of the UTMA account under the “child asset” section on FAFSA and Profile.</p>

3

<p>See IRS Publication 17, table 1-2.2009: [Publication</a> 17 (2009), Your Federal Income Tax](<a href=“http://www.irs.gov/publications/p17/index.html]Publication”>http://www.irs.gov/publications/p17/index.html)</p>

<p>If your parents (or someone else) can claim you as a dependent, and any of the situations below apply to you, you must file a return.
Single dependents
You must file a return if any of the following apply.
• Your unearned income was more than $950.
• Your earned income was more than $5,700.
• Your gross income was more than the larger of:
• $950, or
• Your earned income (up to $5,400) plus $300.</p>

4

<p>Or if your earned income was over $400 and self employment tax is due on that.</p>