Should a Teenager File His Own Tax Return Apart From His Parents?

Exemption - Should a Teenager File His Own Tax Return Apart From His Parents?

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Usually teenagers should file their own tax returns isolate from their parents' return.

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Exemption

If a teenager has earned earnings for a job or self-employment, he should file his own return. A teenager's earned earnings should not be added to his parents' tax return. The parents will probably pay too much earnings tax if they add their teenager's earned earnings to their return. The Irs may not catch the mistake.

A teenager can usually file the simpler Form 1040Ez, especially if his or her only earnings is from working as an employee.

Many parents worry that if a teenager files his own return, the will not be able to claim the child a dependent. This is not usually the case. In most cases, a teenager's parents can still claim the child on their tax return, provided that the teenager did not supply more than half of his or her own financial support. A teenager filing his own return should not check the box on Line 6a, which allows a person to claim themselves for an exemption. Teenagers do not claim themselves if they are claimed as a dependent on their parents' tax return.

The only time the Irs allows parents to consist of a child or teenager's earnings on their return is for unearned earnings belonging to a child. Unearned earnings is earnings from investments such as interest on a savings account, dividends from stock or mutual funds and capital gains distributions from a mutual fund belonging to the child.

Parents, if your child or teenager has unearned income, do not simply add it to your income. You must complete a Form 8814 Parents' election to article Child's Interest and Dividends. The Irs warns that electing to consist of your child's speculation earnings on your return could corollary in higher earnings tax.

For my tax clients, I always file a isolate return for the teenager or child. It keeps things clearer by separating the earnings in the middle of the parent and child.

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