Many teens work a part time job while they are still in school. It’s important to know if they are required to file a tax return. Even if they fall below the filing requirement, they may want to file a tax return to get a refund of any excess federal or state withholding. If the student has less than $1,050 of unearned income (this would be income from savings or investments such as interest, dividends, gains on stock sales, etc) and less than $12,000 of earned income (W-2 income), they are not required to file a federal income tax return. Even if they fall below the threshold that requires them to file a return, they may want to file if they have had federal or state income tax withheld from their checks. Those amounts will be refunded in full if they fall below the filing threshold. Social security and Medicare withholdings will not be refunded.
For students who will be claimed as a dependent on their parents return, it is important that the student mark the box stating that they are being claimed a dependent on another return. Young taxpayers are often excited to get their refund and file early in the tax filing season. If they accidently claim themselves as a dependent, their parent’s will not be able to claim them when they file. Often this requires filing an amended return for the student which delays the parent’s tax return processing.
Each state has their own income threshold to determine if there is a filing requirement so you will need to check your state’s website to see the filing requirement threshold even if you aren’t required to file a federal return, you may need to prepare one in order to file the state return.