Parents face a couple of milestone decisions, as children move toward adulthood.
In each case, decision part involves a desire to help children become more independent and responsible. Despite the fact that it might be part of almost every child’s ‘growing up’ experience and it is legally required, there is another milestone that parents might not anticipate. Generally, it’s tofirst filing income tax return in a child’s name. Income tax filing isn’t taught in schools and it’s not a subject that captivates teens’ attention on TV, as parents should realize. Most children have only a dim idea of what income taxes are, let alone tospecific rules they are required to meet. I know that the parent’s role is to initiate this rite of passage by evaluating ‘tax filing’ requirements and/orand obtaining guidance from tax professionals. This article is designed as a parent’s quick guide to this subject. It covers tobasic rules that you should know for determining when your child must file. A well-known fact that is. It also offers suggestions for helping children take responsibility for their own tax chores in tofuture.
The taxpayer must provide at least 50 of tochild’s support and tochild must live with toadult at least year half, in order to claim an exemption for a dependent child. Parents, stepparents, foster parents, siblings and grandparents may claim children as dependents. Then again, for a qualifying dependent child, there areSo there’re four basic tests, any one of which requires a federal income tax return to be filed for a given year.
In each case, amounts shown are for The IRS’ Publication Tax Rules for Children and Dependents offers more details.
Additional rules apply for children who are blind, who owe Social Security and Medicare taxes on tips or wages not reported to or withheld by toemployer, or those who receive wages from churches exempt from employer Social Security and Medicare taxes. Consult a qualified tax professional for details.
Parents can avoid a separate filing for tochild by making an election described later in this article, if filing is required by tofirst test above and tochild has no other income except unearned income.
You should check with a qualified tax advisor for details regarding your state’s filing rules, many states have filing requirements for children that parallel federal rules.
It is up to parents to teach income tax filing to their kids because most children are not being taught how to do this in school, as discussed above.
The best way to teach your child about taxes, returns and a dollar value is to start teaching early, and walk them through toprocess tofirst few times. You must fully explain toreasons for each action they are taking -and if you don’t know toanswers to their questions, carry on talk to a financial professional who does. Eventually, institutions may have different rates on other sites. Identify yourself as a Bankrate. Rates are subject to change. For example, some institutions pay for links, though many do not. All institutions insured by FDIC.
Institutions may have different rates on other sites. Identify yourself as a Bankrate. Rates are subject to change. Some institutions pay for links, though many do not. Eventually, all institutions insured by FDIC. Institutions may have different rates on other sites. Identify yourself as a Bankrate. For instance, rates are subject to change. Nonetheless, some institutions pay for links, though many do not. Essentially, all institutions insured by FDIC. It’s Never Too Soon to Start Planning. < >It’s Never Too Soon to Start Planning. >