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Do Your Kids Need to File Taxes?

Posted By Madison On January 27, 2015 @ 8:42 am In Tax Tips | 8 Comments

Usually filing taxes for the kids is an afterthought. Only after people scramble to finish filing in time for the tax deadline [1] do they realize they didn’t even think about the kids. Let’s put in on the radar earlier this year. Will you remember to file taxes for your kids?

If your kids earn interest and dividends, or have a job, check out the requirements for filing taxes.

2014 Kids Tax Filing Requirements

If you claim your child as a dependent [2] on your return, the kids need to file taxes if ANY of the following are true for tax year 2014 (due in 2015):

  • Earned income, from a job for example, is more than $6,200.
  • Unearned income, including dividends or interest, is more than $1000.
  • Self employment [3] net earnings are more than $400.
  • Earned and unearned total income is more than the larger of $1000 or earned income plus $350.

Also, if interest, dividends and other investment income are more than $2,000 in 2014, you’re going to get hit with the kiddie tax [4] (which means you’ll pay your tax rate [5] on part of your child’s income).

Filing a Child’s Tax Return

You can file your child’s taxes for free at TurboTax [6].

If you want, you can also attach it to your return if the income is less than $10,000 and only from interest or dividends. This option is available to children under age 19 (or a full time student under 24) using Form 8814.

A word of caution though, qualified dividends [7] or capital gains may be taxed at a higher rate if you attach it to your return instead of filing the child’s return separately.

More Filing Requirements

There are other circumstances when children must file a tax return. For more information see Publication 929, Tax Rules for Children and Dependents [8].

For more information when others must file, see minimum income to file taxes [9].

More Tax Topics

Article printed from My Dollar Plan: http://www.mydollarplan.com

URL to article: http://www.mydollarplan.com/do-your-kids-need-to-file-taxes/

URLs in this post:

[1] tax deadline: http://www.mydollarplan.com/tax-deadline/

[2] claim your child as a dependent: http://www.mydollarplan.com/claiming-dependents-on-your-tax-return/

[3] Self employment: http://www.mydollarplan.com/how-to-calculate-self-employment-tax/

[4] kiddie tax: http://www.mydollarplan.com/what-is-the-kiddie-tax/

[5] tax rate: http://www.mydollarplan.com/tax-brackets/

[6] TurboTax: http://www.mydollarplan.com/go/TurboTax

[7] qualified dividends: http://www.mydollarplan.com/tax-rate-dividend-income/

[8] Publication 929, Tax Rules for Children and Dependents: http://www.irs.gov/pub/irs-pdf/p929.pdf

[9] minimum income to file taxes: http://www.mydollarplan.com/money-file-taxes/

[10] What is the Child and Dependent Care Credit?: http://www.mydollarplan.com/child-dependent-care-credit/

[11] How Much is the Penalty for No Health Insurance in 2014?: http://www.mydollarplan.com/penalty-for-no-health-insurance/

[12] When Do Dependents Have to File Taxes?: http://www.mydollarplan.com/when-do-dependents-have-to-file-taxes/

[13] When You May Want to File an Optional Tax Return: http://www.mydollarplan.com/when-you-may-want-to-file-an-optional-tax-return/

[14] 10 Ways to Lower Your Taxes with Kids: http://www.mydollarplan.com/ways-to-lower-your-taxes-with-kids/

[15] What is the New Health Insurance Premium Tax Credit?: http://www.mydollarplan.com/health-insurance-tax-credit/

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