Shift Your Income to Your Children. The 10% rate bracket provides greater tax savings to your entire family if you shift income-producing assets to your children (aged 14 or older- younger ones are subject to the “kiddie” tax). For example, if your child reported $7,750 income in 2003 that you would otherwise report, your child would pay $700 in tax on that income ($7,750 less the child's $750 exemption is $7,000, taxed at 10%). Contrast this with what you would pay on the same income at 35%: $2,712.50. |
