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Making Finances Simple. Changing Lives.

2/12/2013

Parents, Help Your Kids With This Tip!

If your kids are working a summer job or going off to college and working part-time, you have some great advice you need to give them.....

Individuals who earn less than $12,950 from an employee job in 2022 don't have to file a tax return since the standard deduction would wipe out that taxable income.
 
Self-employment or independent contract work is different in that the threshold on this income is just $400 (due to needing to account for & pay social security and Medicare taxes).
 
This the case unless an individual who is claimed by another taxpayer as a dependent has unearned/investment income exceeding $1,100. This could necessitate a filing requirement.
 
So if your kids are exempt from filing per above, they would be best served claiming exempt from taxes on their W4 forms. This way their paychecks don't withhold taxes, which prevents the need for them to file taxes just to get their tax withholding back. Now their take-home pay will be increased and they won't have to pay to have their taxes prepared!



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