It’s a fact of the taxpaying life: Once you earn a certain amount of money, the IRS wants you to report it and pay taxes on it. That’s true for you, and that’s true for your child too.
So, what kind of money are we talking about, how much counts, and on whose return should it be reported?
Your child must file a return in any of the following situations for tax year 2020:
If your child is blind, the amounts are higher:
Even if your child may not have to file a return, it makes sense to do so in some situations:
If it’s unearned, that means you don’t owe taxes on it, right? Not quite.
Either way, once your child reaches certain amounts, he or she becomes a taxpayer, and must file a return.
It’s important to communicate and work with your child to make sure your child gets the dependency declaration right on their tax return. In order for you to be able to claim your child on your taxes, your child has to declare that they are a dependent on theirs.
A mistake here can cause your own return to be rejected, costing you time and effort to amend your child’s return to get it right.
No—your child also shouldn’t claim an exemption on Form W-4, the withholding certificate every employer asks for.
If able to file, your child is responsible for filing his or her own return and for paying any tax, penalties and interest.
But: If your child is too young or can’t meet these responsibilities for any other reason, you are responsible for filing on your child’s behalf.
At Tax Office & Associates™, we make tax-filing smart and simple—which is great when you have multiple tax returns under one roof. Whether you file for your child or help them file their own return, you’ll both love Tax Office & Associates™' sleek walkthrough and easy setup. Contact us to get started!