Tax Tips – Vol. 1

Parents with working dependents, this post is for you and your working dependent.

Below is the link to an article I found giving some insight into the requirements to file with your working dependents and if they should file on their own as well. I am going to highlight the key points AND provide the link to the article as well.

Happy reading!

What can you claim on your return?

For 2019, dependents who are not 65 or older or blind, who have earned income more than $12,200, must file their own return. Income levels required to file a return for those 65 and over or blind are higher. You do not include their earned income on your taxes. If they earned less than $12,200 in 2019, they do not have to file a return, but may wish to do so to recover any withheld income taxes. You can still claim them as a dependent on your return.

Dependents who have unearned income, such as interest, dividends or capital gains, will generally have to file their own tax return if that income is more than $1,100 for 2019 (income levels are higher for dependents 65 or older or blind).

A parent can elect to claim the child's unearned income on the parent's return if certain criteria are met. Generally, for tax years prior to 2018, the unearned income is taxed at the parents' tax rate. Beginning in 2018, all net unearned income over the annual threshold ($2,200 in 2019) is generally taxed using the tax rates for trusts and estates.

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