Filing Taxes For A Minor: A Comprehensive Guide On When To File A Return

Right now, teenagers have more options for work than ever before. Instead of a traditional job at a fast food restaurant or selling ice cream at the shop down the road, now, teenagers can find a job on their laptops and smartphones. With this new phenomenon, a common question is the process of filing taxes for a minor.

As great as this is, when it comes to taxes, it gets confusing fast. 

What are the income requirements? What are the different types of income and how much does each get taxed? Should you file your child’s tax return yourself?

If this is the information you need, then you’re in the right place. Let’s get into it.

What’s A Dependent?

A dependent is someone who relies on someone else for financial support. The situation that most people think of immediately is children and college students.

Claiming dependents on your tax return is a way for the caretaker to get a refund from the government during tax season. 

But what qualifies someone as a dependent? What are the requirements?

Though the rules are more complicated than the scope of this article, here are the general guidelines for claiming dependents:

  • The dependent must be a U.S. citizen (or equivalent) or a resident of Canada or Mexico
  • You must provide at least 50% of financial support
  • Dependents must be under 19 years of age (if not going to college) or under 24 (if going to college). If the dependent has a life-long disability, there is no age limitation.
  • A dependent can only be claimed on one person’s tax return

Earned Income Vs. “Unearned” Income 

Earned income refers to income that one earned, such as working a traditional job. This is also known as active income. 

“Unearned” income is similar to passive income. This could be dividends from stocks, money from an inheritance, etc. 

Despite both being classified as income, the distinction is vital during tax time. Not only are these two types of income taxes at different rates, but each has a different threshold one must reach to file taxes.

A child must file a return if they earn more than $12,550 (standard deduction) in a tax year. With regard to unearned income, teenagers are only required to file if they earn more than $1,100. 

If the teenager earns less than the amounts listed above, they can still file a return to receive their tax refund. 

If your child earns self-employment income, the threshold for filing is $400. Any income over this amount, such as tips, must be documented and the teenager must file their own tax return. 

Can You File On Your Dependent’s Behalf?

If you claim someone as a dependent, you have the option of filing on your child’s behalf. There are certain limitations in place, such as how much your child earned.

If you choose to go this route, you must file Form 8814 along with Form 1040 (annual income tax return form) and your child won’t need to file on their own.

Please note that you can’t file on your dependent’s behalf and have your dependent file their own return.

Filing taxes for a minor doesn’t have to be complicated, which is why TaxRise recommends 

The Takeaway

If you don’t know where you stand financially, check out TaxRise’s free tax consultation. From this quick call, you’ll be able to determine if you qualify for our services and which tax relief program will work best for your unique situation.

TaxRise has helped thousands of taxpayers just like you resolve their tax issues and erase their tax liability. Now it’s your turn.

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