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Income Tax Basics

Paying federal income taxes for children

Our Two Cents

Do your research to see if your child will need to pay taxes and, if so, which kind.

Does your teen need to file a return? That depends on a number of factors, primarily age and the amount and type of income. In some cases, your teen's income can be reported on your return.

IRS Publication 929 (PDF) is very helpful in sorting through the intricacies of these rules. You may also want to consult with your tax professional and refer to the instructions for IRS Form 1040 (PDF) for details.

Unlike other taxpayers, your child’s income is taxed differently depending on whether it is earned (through work) or unearned (from investments)

  • In 2014 if your child earns more than $6,200 from employment, he or she must file a personal tax return and may owe taxes.
  • If your child’s has more than $1,000 of investment income, a tax return is also required. If this is your child’s only income, you can either file a separate return for your child or include the income on your return.

Note: If you include your child’s income on your return, it could boost you into a higher tax bracket.

  • If your child has investment income between $1,001 and $2,000, it is taxed at his or her rate. Investment income above $2,000 is taxed at the parent’s highest income tax rate.

For more details, see IRS Publication 929 (PDF).


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