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IRS: Teenage workers and filing taxes

Americans can start working at age 16 in most places, and that makes their parents ask when they need to start filing taxes with the IRS.

tax return paperwork to submit to the IRS

If you meet specific criteria, you will need to file taxes.

Even so, dependents can be claimed on a parent’s tax return in many cases.

All working Americans need to file taxes once their income surpasses a certain amount, even children.

If their income is below this limit then another taxpayer may claim them, like a parent.

Even if the taxpayer is a dependent, they could file their own taxes to get a refund, and also save the person that could claim them from being pushed into a higher tax bracket.


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Ages a dependent must be to claim with the IRS

In order to claim another American on your own taxes as a dependent, you need to meet some criteria.

The dependent needs to be a son, daughter, adopted child, stepchild, foster child, sibling or half sibling, or offspring of any of the previously listed individuals.

They must have a SSN and be under age 19 by the end of the year.

If they’re a full time student they must be under age 24.

If they are permanently and entirely disabled there is no age limit.

The child needs to reside with you for over 6 months of the year.

Your child may be able to be claimed as a dependent, but if they have earned income, or unearned, they may still need to file a tax return.


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Filing with the IRS as a dependent with earned income

If a child’s income is greater than the standard deduction they must file a return.

That amount for 2022 is $12,550.

Any amount earned below this isn’t required to be reported, but if they want to get their tax refund back from taxes their employer held they must file a return.

Self employed children that make over $400 must report their income and pay self employment taxes of 15.3%.


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Filing with the IRS as a dependent with unearned income

If a child has over $1,100 of unearned income from investments they must file a return.

This includes capital gains and derivatives.

If the amount stays below $11,000 the unearned income can be reported on the parent’s tax return.

This could make a parent’s income push them into the next tax bracket.


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Filing with the IRS as a dependent with both earned and unearned income

There is a calculation the IRS uses to combine earned and unearned income.

For 2021 if a child’s earned income with $350 is over $1,100, but the amount is under $12,550 they need to file a tax return.

If their gross income is over $12,550 they need to file as well.

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