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September 13, 2020
Question

17 years old / High School Student / Lives with her parents Earned $200 from her blogging side hustle and $3,200 from her part-time job

  • September 13, 2020
  • 3 replies
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17 years old / High School Student / Lives with her parents/ Earned $200 from her blogging side hustle and $3,200 from her part-time job

1. Can this person be claimed as a dependent?

2. Is this person legally required to file a tax return? Why or why not? 

3. If no, should they file a tax return? Explain your reasoning.

    3 replies

    Employee
    September 13, 2020

    Are you asking homework questions---or are these real questions?  

     

    MY DEPENDENT HAD A JOB

    If your dependent has a W-2 for his after-school job, summer job, etc. you do not include the information on your own return. You can still claim your child as a dependent on your own return.  He/she can file his own return for a refund of some of his withheld wages (he won’t get back anything for Social Security or Medicare), but MUST indicate on it that he can be claimed as a dependent on someone else’s return.  (Supervise this closely or prepare it for him!)

    If your dependent’s earnings were over $400 and were reported on a 1099Misc then he must file a return and pay self-employment tax for Social Security and Medicare.  You may want to use this version of TT for that:

    https://ttlc.intuit.com/questions/1900583-what-is-turbotax-free-file-program

    **Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
    Hal_Al
    Employee
    September 13, 2020

    Q. 1. Can this person be claimed as a dependent?

    A. 1. Yes. There are two types of dependents, "Qualifying Children"(QC) and standard ("Qualifying Relative" in IRS parlance even though they don't have to actually be related). There is no income limit for a QC* but there is an age limit, a relationship test and residence test and support test.

    Q. 2. Is this person legally required to file a tax return? Why or why not? 

    A. 2. No, based on the amount and type of income she has**.  This assumes that the $3,200 from her "part-time job" is regular W-2 wages. 

     

    Q.3. If no, should they file a tax return? Explain your reasoning.

    A.3. No. The only reason to file is to get a refund of income tax withheld (Federal [box 2 of the W-2] and/or state [box 17 of the W-2] ). The IRS matching system is not going to "red flag" either her W-2 or side gig, unless she receives some tax form from the side gig (1099-Misc, 1099-K, or K-1).

     

    *A child of a taxpayer can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:
    1. He is under age 19, or under 24 if a full time student for at least 5 months of the year, or is totally & permanently disabled
    2. He did not provide more than 1/2 his own support. Scholarships are considered third party support and not as support provided by the student.
    3. He lived with the parent (including temporary absences such as away at school) for more than half the year

     

    **Your dependent  must file a tax return for 2019 if he had any of the following:

    1.         Total income (wages, salaries, taxable scholarship etc.) of more than $12,200.).

    2.         Unearned income (interest, dividends, capital gains) of more than $1100.

    3.         Unearned income over $350 and gross income of more than $1100

    4.         Household employee income (e.g. baby sitting, lawn mowing) over $2100 ($12.200 if under age 18)

    5.         Other self employment income over $400, including box 7 of a 1099-MISC

    Even if he had less, he is allowed to file if he needs to get back income tax withholding. He cannot get back social security or Medicare tax withholding.

    Employee
    September 15, 2020

    I think this is homework and I'm only posting any kind of answer because other taxpayers may find this thread on a search.

     

    1. A person always reports wages earned on a tax return in their own name, never on a parents' return.  (Sometimes, if the child's only income is passive investments, the income might be reported on a parent's return.)

     

    2. Whether a child is required to file a return depends on the amount of earned and unearned (passive, investment) income.  The rules are covered in publication 501. https://www.irs.gov/forms-pubs/about-publication-501

     

    3. If a child earns money and files a tax return, that does not automatically disqualify them from also being someone's dependent.  You have to look at the totality of their situation.  See publication 501.