Published by Taylor Financial Group for Women
Summer is finally here! That means many kids are starting summer jobs. If this is your child’s first summer working, you may be wondering what tax forms she (or he) should complete. Even if your child has held a job before, it’s important to know if she is using the right forms and filling them out correctly.
For starters, when your child begins her job, she will need to complete an IRS Form W-4, which indicates to the employer how much money should be withheld for income taxes. The main thing to remember when filling out a W-4 for your child is that if she earns less than the requirement to file an income tax return, she is considered exempt and should indicate so on the W-4 so that no income tax is withheld from her paycheck – she will be happy about that! Although, you should confirm with your tax professional. For 2017, dependent children cannot earn more than $6,350 for the entire year in order to qualify. Keep in mind, money will still be withheld from her paycheck for Social Security and Medicare taxes. Another important thing to keep in mind is that there are some exceptions to the above. For example, if your child receives income from interest or dividends (unearned income), she may need to file an income tax return anyway.
Unfortunately, tax rules are complicated, even for children and dependents. But the IRS does provide useful resources to help you determine what your child can and should do. The following are a list of links for some helpful IRS resources:
· Personal Allowances Worksheet
· IRS Withholding Calculator
· IRS Publication 929 Tax Rules for Children and Dependents
· Which Form(s) to Fill Out (IRS Topic 352)
If you’re having trouble figuring out which tax forms your child should complete, give us a call. We are here to help!
Sources:
Kiplinger, What Kids Starting Jobs Should Know About Taxes, June 16, 2017
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. To determine what is appropriate for you, consult a qualified professional. CWM, LLC and Cetera Advisor Networks LLC do not provide tax advice. Please consult a qualified tax professional regarding your specific situation.
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