If the child was 18 at the end of the tax year and had earned income that was more than half of the child’s support, or the child was a full-time student at least age 19 and under age 24 at the end of the tax and had earned income that was more than half of the child’s support, or the child was 24 or older at the end of the tax year, than yes, the kiddie tax can be avoided if the child would have otherwise been subject to the kiddie tax. The hard part here is legitimately arranging for the child’s earned income to be more than half of the child’s support.
Definitions for the kiddie tax:
Support: Parent support includes all amounts spent to provide the child with food, lodging, clothing, education, medical and dental care, recreation, transportation, and similar necessities. To figure your child’s support, count support provided by you, your child, and others. However, a scholarship received by your child isn’t considered support if your child is a full-time student.
Unearned income: for the kiddie tax, “unearned income” includes all taxable income other than earned income (defined below). Unearned income includes taxable interest, ordinary dividends, capital gains (including capital gain distributions), rents, royalties, etc. It also includes taxable social security benefits, pension and annuity income, taxable scholarship and fellowship grants not reported on Form W-2, unemployment compensation, alimony, and income (other than earned income) received as the beneficiary of a trust.
Earned income: Earned income includes wages, tips, and other payments received for personal services performed.
So niche is one site that grades dorms and food. For UM Dorms are a C- and food a B- .
As bad as that is, Gtown is a C- and C.
Makes me wish I applied to Va Tech B+ A+. Or W&L. A / B+.
Edit. Unless I missed something yesterday neither is tops or near for accounting. Hence another reason not to overspend. Neither is top 12 us news (what they rate) or top 50 in this particular ranking.
Edit again. The 2nd link shows UMD #2 for accounting. Also lists Towson top 35. But not Gtown.
And just to add, you are a full time student for the whole tax year if you are a full time student in any part of five months, ie graduating in May means you will still be full time, and therefore need to get a job and have sufficient earned income in order to escape kiddie tax in the year of graduation
I realize I may be in the minority, but it would be a difficult decision for me. I would base my final decision more on my child and peer students and less on accounting - since that will not likely be the major at graduation.
This is a really good response. I am more of a numbers person, but she does love reading, writing, government, and law. She may totally switch from Accounting.
Plus she plans to go to law school so does sue even have plans to be a working accountant ? Of course at this age no one can be 100% assured of anything even if they think they are…
All these kids who say I want to do private equity, consulting, or IB and have zero clue what any of that means, etc.
If your daughter knows she wants to pursue accounting versus other careers in finance like consulting or IB, then maybe the EC organizations, recruiting prep, and networks at Georgetown are not such significant factors. The students do seem to place well in first jobs, however, even on the west coast.
Earnings before an advanced degree can help defray costs of course, but not enough to make up the difference in tuitions. Does the fit of the schools differ significantly?
Graduate school is also a good time to change paths and that alumni network will be important, especially if she seeks an MBA. Masters of Finance is becoming a desired niche degree too, should she become interested.
Not sure what u r saying. UMD, at least on the sheet I put, is showing a 1360-1500 sat and 31-34 act. Yea TO inflates.
Gtown on cds from last year 1380-1530 and 31-35. And they are not test optional. Unless u couldn’t take the test and that’s no longer likely.
I did not say the same. I said based on that (and UMD weighted gpa of 4.39), I said the gap isn’t that large.
We are not comparing U of S Illinois and Gtown
If u want to look at overall rank (usnews) as a basis, you are looking at 23 vs 59 but a lot of gtown 23 comes from school of foreign service. And there’s not a huge difference between those two ranks.
If u compared undergrad b schools…not majors Gtown and UMD are not top 12 usnews.
I’m not saying UMD is Gtown. I’m saying the gap isn’t insanely huge from an overall quality of student.
Don’t forget every flagship has Ivy caliber students. Between honors and other UMD programs, will be lots of Gtown level kids.
This (your daughter’s other interests) is huge reason in my opinion to lean towards GU.
Yes, money plays a role in decisions, of course.
But…for me personally, the horrid past 2 years made it significantly much easier to support our S21 to go to the school of his preference, and to not focus on how much more $ it was compared to other choices.
He (and his peers of course) have had so much uncertainty, isolation and frustration that if he can find more happiness at one school than at another and we can afford it, then we will support that favored choice many times over for sure.
Yes, this is a position not all have the choice to make. I know that. And we are thankful; having S share his joy each week via spontaneous texts, pictures, and FT calls documenting his happy experiences, I am continually thankful. He needed a boost to his mental health and is receiving it.
@ucbalumnus This may depend on state. I believe Maryland allows, so long as subject matter requirements (21 credits in five of nine specified topics)
are met.
Education Requirement for Licensure:150 hours (including B.A.)
Hours in Accounting:
30 undergraduate semester hours in accounting and ethics subject matter, including: one 3 semester credit hour course each in auditing, cost accounting or managerial accounting, U.S. federal income tax and ethics; a minimum of 9 semester hour credits in financial accounting; and a minimum of 9 semester hour credits in elective accounting courses. Additionally, must have least 21 undergraduate semester hours completed in at least in five of the following nine subject areas: statistics, economics, corporation or business finance, management, marketing, U.S. business law, business communication, quantitative methods, and computer science/information systems.
Exam sitting requirements: B.A. Degree (120 hours) in accounting or its equivalent.
