Whether or not a high school student must file an income tax return depends on several factors. For example, if you work at after-school and summer jobs and have income taxes withheld from your pay, filing a return at the end of the year is the only way to get your refund. There are other reasons it may be necessary to file a return, however. In addition, while many states’ rules mirror the federal rules, some states have different filing requirements.
Claiming a Refund of Taxes Withheld
If you earn money working for someone else, you probably have federal income tax withheld, as well as several other taxes. While some federal withholding items are not refundable, like Medicare and Social Security taxes, you may be due a refund of most or all of the income tax that was withheld. Note that filing a federal return won’t trigger a refund of any state or local taxes that may have been withheld from your pay. You’ll need to file a return for each jurisdiction for which income tax was withheld to get that money back. If you had no federal income tax liability the previous year and don’t anticipate any for the current year, you can avoid having income tax withheld by writing “EXEMPT” on line 7 of the W-4 form, and the appropriate state form, when you start a job or update your form.
Earned income is paid to you for working, usually paid in the form of wages, salary, or tips. Even if you had no income tax withheld, you must file a return if your earned income is more than $6,100 and you can be claimed as a dependent by someone else. If you aren’t claimed as a dependent on anyone else’s tax return, the filing threshold increases to $10,000.
Although income from self-employment is earned income, it has different reporting thresholds. Regardless of your earned income from outside sources, if you earned more than $400 from self-employment, you’re required to file an income tax return. For example, if you regularly earn money by babysitting, mowing lawns, walking dogs, raking leaves or shoveling snow and are paid cash, you probably exceeded the $400 threshold and must file a return.
Unearned income is the money you receive by virtue of owning cash assets like stocks and bonds and bank accounts. If you have unearned income in excess of $1,000, or if you sold any stocks and bonds, you must file a return even if the income came from a custodial account and even if there is no tax due. There’s another wrinkle in the tax laws: if you’re under 19, or under 24 and a full-time student, any unearned income you receive above $1,900 will be subject to tax at your parents’ rate. This “kiddie tax” was implemented to prevent parents from shifting assets to their children to avoid paying taxes on the income they generate.
Even if you’re not otherwise required to file a return, it may be to your advantage to do so if you qualify for any of the refundable tax credits. The Earned Income Tax Credit, for example, is a refundable tax credit for low to moderate income taxpayers who meet certain criteria.
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