IRS Pub 929 explains when a dependent child __must__ file a separate income tax return. The relevant rule is: the dependent child has unearned income only which is in excess of $1000 [1].
My question is: when __may__ a dependent child file a separate income tax return?
In particular, __may__ a dependent child file a separate income tax return if he/she has unearned income only which is __less_than__ $1000?
Or conversely, when __must__ a dependent child's income (i.e. unearned income only which is under $1000) be reported on the parent's income tax return?
Does Calif follow the same rules for state income tax returns?
The children are age 10 and 12 in 2013, and they have no disabilities (blindness or otherwise).
It seems to me that, generally and if allowed, it is better to report a dependent child's income separately (at least when it is unearned income only) in order to avoid paying any tax when the child's unearned income is under the standard deduction ($1000? [1]). Right?
----- [1] IRS Pub 929 for 2012 returns specifies a limit and standard deduction of $950 for unearned income only, under 65 and not blind. An Inuit Turbo Tax webpage says the limit is $1000 for 2013. Presumably, that is also the 2013 standard deduction. TBD.