Tax withholding for teen job

[Anonymous]

I'm tired or maybe I could figure this out. DD just got her first job and we're trying to do the W-4 form. I cannot tell if she's exempt from withholding. She will probably make at the most $6,000 this year. She is my dependent. On the form it says that she isn't exempt if she makes more than $1,000 AND has more than $350 in unearned income (like dividends, interest, etc.) if she is someone else's dependent. She has no unearned income. I was just overwhelmed on the IRS website.

Any tax professionals or parents who've been there already know the answer?

[Anonymous]

Mine was not exempt from withholding and made a lot less than that. She did get it all back when she filed her taxes.

[Anonymous]

She can claim exempt on the withholding form. If she has no unearned income and under $6100 of wages she won't be required to file a return. If she didn't owe any tax last year and doesn't expect to owe any tax this year she is exempt from withholding.

[Anonymous]

OP here. Thanks. I was a little concerned about the $6100 limit. She will be working full time this summer, so she may actually earn that much by the end of the year. So she'll have taxes taken out and then file to get them back next winter. A good intro to another facet of becoming an adult.

[Anonymous]

Is she 18? I thought there was no need to withhold for those under 18.

[Anonymous]

I'd let her withhold just in case. I worked full time in the summers at a country club and made abut $8k during the summer and more working part time during the school year. I got it back when I filed taxes in February. It's good practice for the future.

[Anonymous]

She is 17. It didn't seem to make a difference when I was looking at the IRS site under student income.

[Anonymous]

Anonymous wrote:Mine was not exempt from withholding and made a lot less than that. She did get it all back when she filed her taxes.

Should clarify that mine does have unearned income on some UTMA accounts we set up way back when and never converted to 529s (didn't want to have too much in 529s). So she's had to file tax returns for years.

But given that yours will be close to the $6100 limit it seems safest to withhold and then get a refund.

[Anonymous]

One reason to go ahead and file a tax return is she will have earned income and you can open a ROTH IRA for her.

[Anonymous]

Anonymous wrote:She is 17. It didn't seem to make a difference when I was looking at the IRS site under student income.

Maybe that only applies if they're a domestic employee, i.e., you've got a summer babysitter who hasn't turned 18 yet.

[Anonymous]

Anonymous wrote:One reason to go ahead and file a tax return is she will have earned income and you can open a ROTH IRA for her.

Excellent idea.