Does Your Child Need to File an Income Tax Return?

The IRS does not exempt anyone from the requirement to file a tax return based on age, even if your child is declared as a dependent on your tax return.¹

Your dependent children must file a tax return when they earn above a certain amount of income.

Dependent children with earned income in 2020, in excess of $12,400 must file an income tax return. This threshold may change each year (in 2019 it was $12,200), so please reach out to us so we can assess your individual situation.²

Even if your child earns less than the threshold amount, filing a tax return may be worthwhile if he or she is eligible for a tax refund. The standard deduction for a child is different from that of an adult: It is the greater of $1,100 or earned income plus $350, with the maximum equal to the regular standard deduction (same as 2019).³

The rules change for unearned income, such as interest and dividend payments. When the annual total of unearned income exceeds $1,100, then a return must be filed for your child. If his or her unearned income only consists of interest and dividends, then you can elect to include it on your own return and combine it with your income, though it may result in higher income tax to you.

If you decide to prepare a separate return for your child, the same reduced standard deduction rules detailed above will apply.

Fill out the form below and we’ll get back with you about your individual situation.

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1. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties.
2. IRS.gov.
3. IRS.gov.

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The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2020 FMG Suite.

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