Whether you have to file a tax return depends on your age, filing status and how much earned and unearned income you received for the tax year. Even if you didn’t earn enough money to have to report the income, you still need to file a tax return to claim any tax refund you have coming if an employer withheld income tax from your paycheck.
Reporting Earned Income
If your gross income for the year -- the total of your earned and unearned income combined -- exceeds a certain limit, your parents can’t claim you as a dependent unless you are a qualifying child. Under Internal Revenue Service guidelines, earned income includes wages or salaries you earn, tips you receive, taxable scholarships and fellowship grants. Although the amount can change each year, if you had earned income that exceeds the limit set by the IRS, you must file a tax return. You also must file a return if you had net self-employment earnings that exceed the amount the IRS allows.
Reporting Unearned Income
The IRS considers taxable interest, ordinary dividends and capital gains distributions as unearned income. According to federal tax law, if you are a single dependent, your parents can include interest and dividend income you received for the year on their tax return. In that case, you won’t have to file a return, but your parents could end up paying more income tax if they include your unearned income on their return. Like earned income, you must file a federal income tax return if you go over the limit the IRS allows before you have to report unearned income.
Parents Reporting Your Unearned Income
Certain rules apply if you don’t file a tax return and your parents report your unearned income on their return instead. At the end of the tax year, you must be younger than age 19, or age 24 if you are a student. The part of your gross income that came from interest and dividends income must be less than the IRS limit for the year. In addition, you can’t have made any estimated tax payments for the year or had federal income tax withheld if you want your parents to report the income.
Meeting Qualifying Child Tests
Your parents can still claim you as a dependent even if your gross income exceeds the limit the IRS allows, as long as you meet the relationship, age, residency and support tests. To meet the residency test, you must have lived with your parents for more than half the tax year. The IRS considers you as having lived with your parents even if you were temporarily away attending college or other post-secondary school. According to the support test, you must not have provided more than half of your own support for the year if your parents claim you on their tax return as a qualifying child.
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