@cptofthehouse But if the excess taxable amts are less due to the greater standard deduction, does the higher tax rate make the taxes due more than the old kiddie tax rate? It may, but without actually going through and doing the math, I wonder. The article stated that it would increase the tax burden by $1500 at a private school. I question their numbers b/c non-QEE don’t really vary so much by public/private. $12-16,000 seems the typical span for room/board costs whether public or private. The student gets to claim the $12,000 standard deduction, so the taxable portion is only beyond that. If the new tax rate is say 37% and the old is 10%, based on the different formulas, what is the actual tax differential on say $17,000?
(IIRC, which I may not b/c it has been over a yr), I think it used to be that the $6300 personal exemption was used to determine whether or not they needed to report, but then if they did (which with a full-ride they would have to), I think anything over $2100 was taxed at the parent’s marginal tax rate.)
What I don’t remember is if they were able to deduct their standard deduction and the $2100 or if it was the amt beyond $2100 if they had to file. We always paid approx 1/3 of his scholarship, so based on my just running numbers through my head, I would say he didn’t get to deduct the $6300, but I may be wrong b/c I might be confusing when he had additional REU $$ amts (which added an additional $5000 in scholarship $$ beyond his full-ride) vs. just when he had room and board scholarship $$.
I’m too lazy to run through the numbers and figure it out.