How Much Can I Expect to Get Back in Taxes

febrero 17, 2022 Publicar un comentario

Teens & Taxes: How Much Can Your Teen Brand Before Needing to File Taxes?

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Practise you accept a devoted working or budding entrepreneur in your household? If your teen earned income in 2021, they might need to file taxes this year.

See: Teens & Taxes: What Documents Does Your Child Need to File Taxes?
Find: The 4 Best Bank Account Options for Kids and Teens

You might be surprised to larn that the earned income thresholds for whether teens need to file taxes or not are exactly the same as they are for adults. Both teens and single adults with a gross income that's more than $12,550 will need to file a taxation return. If a teen (or adult, for that affair) is blind, that threshold rises to $14,250.

What If My Teen Worked a Side Gig?

If your teen worked a side gig, where they were paid as a 1099 contractor instead of equally a Westward-2 employee, they must claim that coin on tax returns if the total income exceeds $400. Your teen will need to file a Schedule SE with their 1040 tax form and pay self-employment taxes on that income.

If they earned $600 or more from any single source, your teen should receive a 1099-NEC form from the visitor that contracted the piece of work. If your teen worked a gig in 2021, it might be wise to speak with a tax practiced specializing in small businesses and independent contractors to help calculate any expenses they might be able to deduct from their income to reduce their taxation nib.

What If My Teen Sold Products Online?

If your teen had a minor online shop or sold items through Facebook Marketplace, they will also need to declare that income. Beginning in 2022, payment platforms like PayPal and Venmo volition outcome 1099-K forms to people who receive payments of $600 or more than for "goods and services" sold. But for the 2022 taxation year, it'south important for online sellers to track this income and report information technology on their ain.

There is an exception to the rule. If your teen decided to assist yous clear clutter by property an online garage sale and selling used items, they don't need to declare whatsoever income if they sold the items for less than their original purchase price. If they decided to ransack your cranium and sell their onetime Ty Beanie Baby drove or collectible Star Wars LEGO sets that appreciated in value, nonetheless, they'd accept to pay taxes on the profit.

See: Teens & Taxes: Quick Tips for First-Time Filers (and Their Parents)
Find: The Meridian 6 Financial Apps To Help Teens Learn More About Money

But let's face it, owing taxes on a $7,199 Ultimate Collector's edition Millennium Falcon LEGO set would be a nice trouble for you and your teen to accept.

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Dawn Allcot is a full-fourth dimension freelance writer and content marketing specialist who geeks out about finance, e-commerce, technology, and existent estate. Her lengthy listing of publishing credits include Bankrate, Lending Tree, and Chase Bank. She is the founder and possessor of GeekTravelGuide.net, a travel, technology, and amusement website. She lives on Long Isle, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten, and iii lizards of varying sizes and personalities – plus her two kids and husband. Find her on Twitter, @DawnAllcot.

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