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Taxes for Teens

Taxes for Teens. Jennifer Allen Allen, Gibbs & Houlik, LC June 19, 2013. Topics Students N eed to Know. Filing status Independent vs. dependent How do I fill out a W-4? Do I have to file? How do I file? What documents do I need to file? Deductions vs. exemptions. Filing Status.

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Taxes for Teens

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  1. Taxes for Teens Jennifer Allen Allen, Gibbs & Houlik, LC June 19, 2013

  2. Topics Students Need to Know • Filing status • Independent vs. dependent • How do I fill out a W-4? • Do I have to file? • How do I file? • What documents do I need to file? • Deductions vs. exemptions

  3. Filing Status • Single • Married filing jointly • Married filing separately • Head of household • (unmarried, keep up a home & qualified person lives with you more than 1/2 of the year)

  4. Independent vs. Dependent • Dependent: Someone else provides more than 50% of your support (rent, utilities, food, etc) • Differs from financial aid for college dependent (easier to be independent for tax purposes than for financial-aid purposes)

  5. Completing a W-4

  6. Do I Have to File? • If you are dependent, earned income over $6,100 or unearned income over $1,000 • If you are independent, as single $10,000 or married filing joint $20,000 or head of household $12,850 • If you receive tips and your employer did not withhold Social Security & Medicare tax • Net earnings from self-employment of at least $400 (lawn-mowing business, babysitting, etc.) • These are the most common but there could be more reasons that you must file.

  7. Should I File Even if I Don’t Have To? • Earned Income credit ($487-$6,044 credit depending on number of kids & income) • $14,340-19,680 with no kids • $46,227 single/$51,567 MFJ with 3 kids • Additional child tax credit ($1,000/child even if no liability) • American Opportunity credit ($1,000 is refundable even if no liability) • Any federal or state tax withheld

  8. How Do I File? • Federal • www.irs.gov has freefile for income less than $57,000 • Kansas • www.kansas.gov/webfile for state returns for income less than $1,000,000 • Tax professional

  9. What Documents Do I Need to File? • W2s and 1099s • Social Security number for you (and dependents) • Tuition Statements (Form 1098-T) if you have higher education expenses • Student Loan interest (Form 1098-E)

  10. Deductions vs. Exemptions • Personal exemptions are $3,900/person. • Standard deductions are • $6,100 for single/married filing separate • $12,200 married filing joint • $8,950 head of household or • $1,000 or earned income plus $350 dependent

  11. Deductions, continued • Itemized deductions • Uninsured medical and dental expenses (greater than 10% of adjusted gross income) • Greater of state income taxes or sales tax paid • Interest on primary residence • Taxes on primary residence • Taxes on personal property (car, boat, etc.) • Charity contributions • Unreimbursed employee business expenses, tax prep fee, investment fees, safety deposit fees (greater than 2% of adjusted gross income)

  12. Questions? Jennifer Allen Jennifer.Allen@aghlc.com (316) 267-7231

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