Question

Prepare for 2023 tax return filling for my child

Forum|Forum|2 years ago
September 8, 2023
3 replies
0 views

I have a daughter who will turn to 18 years old this October. She is an university student now.

This summer, she was working as a part-time employee and got paid. The store also did tax withholding from her paycheck.

The total income she had this summer was about $3000 before tax. I believe she will get a form 1099-MISC or 1099-XXX.

UPDATE: I am sorry. I believe she will get W-2 form ( Not 1099-XXX)

My question is: For 2023 tax return: Does she need to file tax return separately? OR should she do it separately?

I and my wife always have married filing jointly, Can we includes $3000 as our imcome and she won't have to file tax separately?

Thank you!

Not A Product Question

X

xmasbaby0

Employee

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 or 1099NEC then he must file a return and pay self-employment tax for Social Security and Medicare.

You might also want to use free software from the IRS Free File versions:

https://apps.irs.gov/app/freeFile/

**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.**

L

LocHaAuthor

Thank you! From your reply, I understand that she must file the tax return separately and on her tax return document, she must indicate that she can be claimed as a dependent on someone else’s tax return (her parent tax return) and we (parent) are still able to claim her as qualifying dependent (<24 years old plus full-time student). Thanks!

X

xmasbaby0

Employee

@LocHa Your post has some contradictory information. You say that there was tax withheld from your daughter's paychecks---which would suggest she will be receiving a W-2 with tax, Social Security and Medicare withheld. But then you say she will receive a 1099. Which will it be? If she has federal tax withheld, it will be in box 2 of her W-2; state tax withheld will be in box 17. She can seek a refund of that tax if it was withheld, but will not be refunded for anything withheld for Social Security or Medicare.

If she has been working as an independent contractor, then she could get a 1099NEC and must file a return if she made over $400. She will OWE self-employment tax and will have to pay all of her Social Security and Medicare.

You need to be clear on what sort of document she will be receiving for the income she has earned. While she is a full-time student under the age of 24, she can be claimed as a dependent, but must say on her own return that she can be claimed.

**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.**

VolvoGirl

Employee

Sorry she has to file her own return for her income. If they took out withholding she will probably get a W2 not a 1099NEC. She wouldn't have to file if she gets a W2 since it's under the standard deduction amount except she has to file to get back the withholding.

If she gets a 1099 she has to file for $400 or more as self employment income.

If she files a return be sure she checks the box that says she can be claimed as a dependent on someone else's return. You can still claim her since she is under 19 or under 24 and a full time student.

L

LocHaAuthor

Thank you. You are correct. She will get W-2 I think so she does not have to file a tax return separately, so in this case, do we (parent) have to report her income ($3000) in our tax return?

VolvoGirl

Employee

NO. You do not report her income on your return. She doesn't have to file unless they took out tax withholding in W2 box 2 (federal) or box 17 for state. But not for SS and Medicare in boxes 4 & 6.

N

NCPERSON1

@LocHa

NO! your daughter's income belongs on her tax return! it will list HER social security number. However, you still claim her as she is a student.

On her tax return, she has to check the box indicating she CAN BE claimed by someone else. Since she is receiving a 1099-NEC statement (i.e. she was not an employee), she is required to file because her income exceeds $400.

And I just reread your post....you are using terms interchangeably which can create confusion. Was she an employee or a 1099 contractor. If the employer withheld the social security and medicare tax, she was an employee. In that case, if no federal or state tax was withheld, she has no requirement to file until her income exceeds $13,850.

There is no "income tax" to be paid.

But there is "Self Employment tax" of 15.3% to be paid. That is the social security and medicarea tax that would had been withheld had she been a W-2 employee.

The way it works for a W-2 employee is the federal government expects to receive 7.65% from the employee and a like amount from the employer. The employer can deduct his portion as a business expense.

For a 1099-NEC contractor, it works simpliar, but since there is no separate employer, your daughter pays the entire 7.65% times 2 but then can deduct half from her income when calculating her income tax, but there won't be any income tax in this case so subtracting half doesn't do anything.

Separately, be sure to take advantage of the College tax credits (AOTC or LLC) based on form 1098-T that YOUR DAUGHTER receives. But it is you that needs that form to create the credit. It is confusing and I suspect many fail to take advantage of the credit.