 By: Gary M. DellaPosta, CPA Children who receive investment income are subject to special tax rules that affect how parents must report a child's investment income. Some parents can include their child's investment income on their tax return while other children may have to file their own tax return. If a child cannot file his or her own tax return for any reason, such as age, the child's parent or guardian is responsible for filing a return on the child's behalf. Here's what you need to know about tax liability and your child's investment income. 1. Investment income normally includes interest, dividends, capital gains and other unearned income, such as from a trust. 2. Special rules apply if your child's total investment income in 2015 is more than $2,100 ($2,000 in 2014). The parent's tax rate may apply to a part of that income instead of the child's tax rate. 3. If your child's total interest and dividend income are less than $10,500 ($10,000 in 2014), then you may be able to include the income on your tax return. If you make this choice, the child does not file a return. Instead, you file Form 8814, Parents' Election to Report Child's Interest and Dividends, with your tax return. 4. If your child received investment income of $10,500 or more in 2015 ($10,000 in 2014), then he or she will be required to file Form 8615, Tax for Certain Children Who Have Investment Income of More Than $2,100, with the child's federal tax return for tax year 2015. In addition, starting in 2013, a child whose tax is figured on Form 8615, Tax for Certain Children Who Have Unearned Income, may be subject to the Net Investment Income Tax. NIIT is a 3.8 percent tax on the lesser of either net investment income or the excess of the child's modified adjusted gross income that is over a threshold amount. Gary DellaPosta is a CPA and founder of the firm. A graduate of Bryant University, he is a member of the American Institute of CPA's as well as the Massachusetts Society of CPA's. In addition to providing accounting, tax and advisory services to individuals and businesses, he also provides litigation support to attorneys and has been recognized as an expert in numerous Massachusetts' courts. Mr. DellaPosta serves on the Board of the Barnstable County Mutual Insurance Co., where he serves on the audit, investment and employee benefit committees. He is a Director at The Cooperative Bank of Cape Cod, where he serves on audit, governance, and personnel committees, and is a former director of Eastern Bank and Plymouth Savings Bank. He also serves as the Treasurer of the Community Health Center of Cape Cod and is a former trustee of Heritage Museum & Gardens.
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 Reading Makes Cents Eligibility and Rules
 Beyond the basics of budgeting and saving, you will want to get your child involved in saving and investing. The easiest way to do this is to have the child open his or her own passbook savings account.
If you want your child to get familiar with investing, there are various child-friendly mutual funds available. The mailings from the fund can be a source of education. Or you may want to get the child interested in individual stocks. You may want to start a "matching" program with your kids to encourage saving. For instance, for every dollar that the child puts into a savings account or investment, you might match it with 50 cents. If you want to get your kids involved with investing, it will usually have to be done through a custodial account. There are generally two types of widely used custodial accounts-one is set up under the Uniform Gifts to Minors Act, and the other under the Uniform Transfers to Minors Act. The type of custodial account available depends on which state you live in. With a custodial account, the child is the owner, but the custodian (usually a parent) manages the property until the child reaches the age of majority under relevant state law-either 18 or 21. The custodian must follow certain rules concerning management of the property in the account. These rules are intended to ensure that the custodian does what is in the child's best interests. IRAs for Kids If your child has earned income-from a paper route or baby-sitting, for example, or from working in the family business he or she can contribute earnings to an IRA. The IRA can be an extremely effective investment for a child because of the IRA's tax-deferral feature and the length of time the money is left in the IRA. If $3,000 per year is contributed to the child's IRA for ten years and the money is left to grow until the child reaches age 65, the amount in the IRA could reach $600,000 or more, depending on the returns on the investment. In 2013, your child can contribute the lesser of his or her earned income for the year or $5,500, either to a traditional IRA or a tax-free Roth IRA. The contribution limits are the same for both types of accounts. To replace the "lost" earnings, the parents can give $3,000 per year to the child (or the amount of earned income the child has, if less). The child may have to file tax returns. The drawback of course is that, with some exceptions, the money cannot be withdrawn before age 59-1/2 without tax penalty. Related Guide: For tax rules on IRA withdrawals for higher education, please see the Financial Guide: HIGHER EDUCATION COSTS: How To Get The Best Tax Treatment. Gary DellaPosta is a CPA and founder of the firm: Gary M DellaPosta, CPA's & Business Advisors. A graduate of Bryant University, he is a member of the American Institute of CPA's as well as the Massachusetts Society of CPA's. In addition to providing accounting, tax and advisory services to individuals and businesses, he also provides litigation support to attorneys and has been recognized as an expert in numerous Massachusetts' courts. Mr. DellaPosta serves on the Board of the Barnstable County Mutual Insurance Co., where he serves on the audit, investment and employee benefit committees. He also serves as the Treasurer of the Community Health Center of Cape Cod, is a Director at The Cooperative Bank of Cape Cod and is a former director of Eastern Bank and Plymouth Savings Bank.  Cape Cod Mommies is excited to be co-sponsoring June's Giveaway with Bum Boosa Bamboo Products ! Bumboosa ws founded by fellow Cape Cod Mom, Sonja Sheasley. A few years ago, Sonja took classes at the Sandwich Village Herb Shop (now closed) in an effort to make natural lotions for her children due to their sensitive skin. As many of you may know, baby wipes and the majority of mainstream baby products contain harmful chemicals. Many times these same products profess to be for "sensitive skin" or say they will clear up diaper rash. I have found those products to be very misleading, often times finding that those products actually further aggravated sensitive skin. I can usually be found on the weekend at local Farmer's Markets trying to track down homemade calendula oil or lotion to treat my son's excema and rashes. So I was thrilled when I had the amazing opportunity to try out the Bum Boosa products! Bum Boosa Products are eco-friendly anod not filled with ANY harsh chemicals! They get their bamboo from China but are made right here in the U.S.A. and I always think it is nice to support local business, especially a Cape Cod business! Right off the bat, I was drawn to the fabulous smelling wipes! A baby wipe that actually smells good even after it has wiped an atomic size mess up is a winner in my book. The smell of lavender and citrus is beyond pleasing. In fact, at a recent family cookout, I kept receiving compliments over my scent: "Wow, you smell fantastic! Is that lavender?" Imagine their surprise when I informed them it was actually my sons' baby wipes! I even gave a wipe to my son to play with and he was super excited by it. He kept smelling it in true yogi style saying, "Mama, ahhhhh". When I first opened the package of wipes, I thought it was smaller than a standard wipe, but I realized it was just folded and shaped differently. Oh Happy Day! Bum Boosa wipes still have the same surface area as standard wipes do! And I managed to make 2 packs of 80 ct wipes last me 3 weeks! Now that is bang for your buck!  I am also totally in love with Bum Boosa diaper cream! It is 100% natural and made from bamboo powder, oils and herbs! It is completely free of any preservatives, synthetic fragrances and dyes! This is a win-win and a little goes a long way! My son is so sensitive to so many products and foods that he often gets a diaper rash especially after citrus or tomatos. Since we started using a little bit of this cream, we have been rash free and smell fantastic!!!
To celebrate Summer, Bum Boosa has generously donated a swag bag for a Giveaway to go to ONE lucky Cape Cod Mom! The Eco Baby Gift Bag comes with (3) packages of their bamboo baby wipes, a 4 ounce bamboo diaper rash ointment, and a 10 ml bottle of pure grade lavender essential oil with suggested uses and safety information. This is valued at $39.99 and will be delivered free of charge to the winner. Bum Boosa will also be participating in the upcoming debut of the Cape Cod Mommies Discount Club (stay tuned for how you can save on Bum Boosa Products!) There are lots of ways to enter and you can enter multiple days! Goodluck and Happy Wiping! 
Grocery stores price items around holidays, customer shopping patterns & seasonal produce. Did you know which entrance you choose to enter a store would play a factor in how much you spend? Studies have shown that customers who enter a store through the right-hand entrance & shop counterclockwise will spend more than those who do the opposite. Next time, try shopping clockwise & you will probably save some money!
Easter has come & gone. As you have probably noticed, all that candy & those plastic Easter eggs are on the clearance racks. This is a great time to stock up on non-perishable items for next year. See Ashley Bunker's recent blog post and candy stash from CVS at: http://thesavingsmomma.com/major-score-at-cvs-ka-pow/ Earth Day was April 22nd & most stores will have organic foods, reusable bags & energy efficient items on sale. Like years past, Target will be giving away free reusable bags to all customers on Earth Day. Since most grocery items are priced lower at Target than traditional grocery stores, you may want to check them out on the 22nd & grab a free bag while supplies last! Cinco de Mayo is right around the corner & all traditional Mexican food items will be priced to move. Make sure to stock up on chips, salsa & refried beans. Beer & tequila will also be discounted, so if you’re looking to celebrate after the kids go to bed, stock up! Our official kick-off to summer will be here before we know it. Memorial Day is known as one of the two holidays great for deals on everything you need to BBQ (Labor Day is the other holiday). So towards the end of May, look for deals on hot dogs, hamburgers, condiments, paper plates & sunscreen ~ everything you need to start the summer off on a good note. Don’t forget to buy what’s in season. Not only will it save you money, it will also be fresher! Here is a quick list of produce that is in season in April & May:
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