how do i avoid kiddie tax 
parents or grandparents can avoid the kiddie tax by keeping the child s annual investment income at 2 500 or less this can be accomplished in a number of ways including investing in assets that don t pay much in the way of income or dividends or in bonds where the payment of interest can be deferred until the child is no longer subject to the kiddie tax the bottom linethe kiddie tax a tax imposed on individuals under a certain age whose unearned income is higher than an annually determined threshold is designed to put an end to an old tax loophole and is something parents need to be aware of if you are investing on behalf of a child consider speaking to a financial advisor or tax advisor firstly it s important to be aware of the rules and your obligations and secondly there are ways to limit and or avoid this liability 