Does Your Dependent Need to File a Tax Return?

Whether or not your dependent is required to file a tax return depends on a few factors. When deciding if your dependent is required to file their amount of income, type of income, and dependency status should all be taken into consideration.

Types of income and taxes:

Earned income only: A dependent is required to file a separate tax return if their earned income is above the standard deduction – $6,350 for 2017. If they earned less than that, they would not be required to file. However, if federal income tax was withheld, they might be entitled to a refund.

Unearned income only: If a dependent has unearned income in excess of $1,050 for 2017, a tax return is necessary. However, the choice can be made to either file a separate return for your dependent or report that income on your own return.

Combination of earned and unearned income: In this situation, both the earned income and unearned income rules are applicable. Additionally, your teen will be required to file if their combined income is greater than the larger of: $1,050, or earned income plus $350.

Self Employment: If your dependent’s compensation was reported on a Form 1099-MISC, they are considered to be self-employed for tax purposes. Self employment tax is required when any self-employed persons net earnings are in excess of $400.

Kiddie Tax: Your dependents unearned income less than $1,050, for 2017, is not taxed. Unearned income between $1,050 and $2,100, for 2017 is taxed at the dependents rate. Unearned income above $2,100, for 2017 is taxed at the parent’s highest income tax rate.

If you have any additional questions, please contact Brian Reed at 314-576-1350 or at

Brian Reed is an Accounting Services member with BWTP P.C. Read more about Brian here.

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