(Not so good news from Ron Mueller, author of “It’s How Much You KEEP, That Counts! Not how much you Make”)

When a dependent child’s “unearned income” (usually from investments) exceeds $1,700, income above that threshold is taxed at the PARENTS’ tax bracket (possibly as high as 35%), instead of the child’s lower rate — usually 10%.

Until now, that only applied to kids who were under age 14 at year-end. The new law, retroactive to Jan.1, 2006, applies the Kiddie Tax to all dependent children under the age of EIGHTEEN - not 14.

But the Kiddie Tax does NOT apply to EARNED income, as described in Chapter 6 of “It’s How Much You KEEP, That Counts! Not how much you Make” (available at www.TaxSaverOnline.com).

Earned income is still TAX-FRE.E up to $5,150 per child in 2006, and any earned income above that amount is taxed only at the child’s 10% rate. Re-read Chapter 6 and hire your kids - as young as 7 year olds!