Many people are under the false impression that dependents do not need to file income tax returns, but even the youngest of children could file a tax return if they meet Internal Revenue Service requirements. Generally, children are required to file returns if they meet certain income levels.
- Skill level:
Things you need
- IRS Form 1040
- W-2 forms
- 1099 forms
- Any other tax forms received
Determine if your child needs to file a return. Use the Standard Deduction Worksheet for Dependents in Publication 929, Tax Rules for Children and Dependents, to determine your child's standard deduction. Your child is not required to file if her total income is below her standard deduction. In 2009, this could be as little as £617 or as much as £3,705.
Calculate your child's gross income. Generally, this would be the total of your child's earned and unearned income reported on his W-2s, 1099s and other tax forms.
Determine if your child has any adjustments to gross income. Most children will not have any. For information on adjustments, refer to the Form 1040 instructions.
Subtract your child's standard deduction as calculated in Step 1 from the adjusted gross income. This is your child's taxable income. If your child only has earned income and or her investment income is less than £1,235 in 2009, use the tax tables provided in the 1040 instructions to determine her tax liability.
Any investment income your child received in excess of £1,235 for 2009 will be taxed at your marginal tax rate. This is commonly referred to as Kiddie Tax.
Use the calculations to fill out Form 1040.
Have you child sign the return if you will be mailing in a paper form. If your child is too young to sign, sign his name followed with the word "by" and your signature, indicating parent or guardian for minor child.
Mail the return to your regional IRS centre. If electronically filing, follow the instructions provided by your e-file provider to submit the return to the IRS.
Tips and warnings
- If your child's only income is interest and dividends less than £6,175, you may elect to include the income on your tax return by filing Form 8814 with your return.
- The instructions are for general educational purposes only and are not intended to be construed as specific tax or financial advice. If you have further questions on this topic, you should consult your tax or financial adviser.
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