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Does your child need to file an income tax return?

Does your child need to file an income tax return?

February 28, 2022
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As parents, we encourage our children to work, so they can learn important values about work and independence. At what point, if at all, do children need to file an income tax return for the money they earn?

The IRS does not exempt anyone from the requirement to file a tax return based on age, even if your child is declared as a dependent on your tax return.1

 Your dependent children must file a tax return when they earn above a certain amount of income.

Dependent children with earned income of more than $12,400 must file an income tax return. Dependent children with unearned income of more than $1,100 must also file a return. And if the dependent children earned and unearned income together total more than the larger of $1,100, or a total earned income up to $12,050 plus $350.2

These thresholds are subject to change, so please consult a professional with tax expertise regarding your individual situation.

Here's an example. Kyle is a 20-year-old college student who's claimed as a dependent by his parents. He received $400 in unearned income and $5,500 for a part-time job on campus. He does not have to file a tax return because both his unearned and earned income fall below the thresholds. Kyle's total income of $5,900 is less than his total earned income plus $350.

Even if your child earns less than the threshold amount, filing a tax return may be worthwhile if your child is eligible for a tax refund. If you decide to prepare a separate return for your child, the same reduced standard deduction rules detailed above will apply. 

If you have any questions, feel free to reach out. 

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1. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.
2. IRS.gov, 2021

Concord Wealth Partners, LLC (“CWP”) and Concord Asset Management, LLC (“CAM”) are investment advisers registered with the Securities and Exchange Commission (SEC). Both firms are affiliated with Trainer, Wright & Paterno (“TWP”) through common ownership. Concord Wealth Partners and Concord Asset Management provide investment advisory services and may provide such services to TWP clients. Concord Wealth Partners and Concord Asset Management do not provide tax or accounting services. TWP is not involved in providing investment advice on behalf of CWP or CAM, nor does TWP hold itself out as providing advisory services on behalf of CWP or CAM. No client of TWP is under any obligation to use the services of CWP or CAM. CWP shall not receive any portion of the fees charged by TWP, referral, or otherwise. It is anticipated that TWP professionals, solely incidental to their respective practices as CPAs of TWP, shall recommend CWP’s, or CAM’s, services to certain of its clients. More information about Concord Wealth Partners, Concord Asset Management, and their relationship with TWP can be found at Concord Custom Wealth Group. Respective Services Offered: Investment advisory services are offered through Concord Wealth Partners, LLC (CWP) to individuals and small business owners. Asset management services are offered through Concord Asset Management, LLC (CAM) to financial advisors and professionals. Tax and accounting services are offered through Trainer, Wright & Paterno (TWP) to individuals and small business owners. All of Trainer, Wright & Paterno’s CPAs and accountants are members of the American Institute of Certified Public Accountants. ANY QUESTIONS: The IA Firm’s Chief Compliance Officer remains available to address any questions regarding rankings and/or recognitions, including the criteria used for any reflected ranking. We take protecting your data and privacy very seriously