Unexpected Increases

Nope, not in my income, or my tax bracket :-(

2006 tax returns will likely bring an unexpected increase in taxes for parents setting aside money for minor children. Details of the law changes, focusing on how it affects college savings, can be found here.

The gist of it is that investment income over $1700 for children 14-18 is now taxable at the parent's tax rate rather than the child's lower rate, and the change in the law, made in May 2006, is retroactive to the beginning of the 2006, so parents who sold stock for their minor children may be facing additional unexpected taxes this Spring as they prepare to file.

If you think this might affect your taxes, you might want to consult a tax pro.