I just saw your post #98, @annoyingdad. Thanks!
I had seen that thread. I’ve read a lot of these threads with great interest. Thanks, though, for pointing it out.
Yeah, the biggest hit my undergrad son took was due to the kiddie tax. He also took a fair-sized hit by being my dependent (though he didn’t have to depend on me at all). That son’s scholarships were taxed at my rate. That’s what hurt him the most.
My other son, a grad student with a few jobs and good enough W-2 earnings, along with a full-ride plus stipend in huge scholarships, did not get hit by the kiddie tax. THAT son got a pretty good tax refund!
I agree with you. It strikes me, too, that the tax code was written with the intent to be generous to families, and that most families will benefit by the rules as they are written. It is probably only a very small percentage of us who are hit by this really odd, almost cornering, tax code that has our fully-funded kids paying huge taxes on their scholarships.
It’s kind of because of that that I was so torn as to whether to file with the sort of thinking that has been discussed on these threads. (“I didn’t pay more than half his support and he didn’t live at home, so why should he be my dependent and pay at my rates?”) That sort of thinking seems much more fair and reasonable to me than the way the code is written! It almost makes me wonder if they inadvertently wrote it wrong, never intending for those of us in these shoes to pay the exorbitant rates our kids have to pay.
I will say, it sure has been great to have such a wonderfully smart, engaged, diverse sounding board for these matters here on CC! Thankful for that!