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When:
January 01, 2001

Who it Affects:
For taxpayers who might have too many deductions.
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2001 Tax Law Changes
A break on the kiddie tax

For minors under age 14 with investment income

Heres how investment income for children under age 14 is treated:

The first $750 is tax-free.

The next $750 is taxed at the childs rate -- mostly likely 10% or 15%.

Amounts over $1,500 are taxed at the parents rate. The top rate for 2001 was 39.1%. The top rate for 2002 and 2003 is 38.6%.
Related Tax Article(s): 5 ways to cut your 2002 tax bill in 2001