Filing your taxes can be a daunting task, especially if you’re doing it for the first time. There are many things to consider, like what tax bracket you fall in and what deductions you’re eligible for. For kids who want to file their own return, it’s even more complicated. That’s why we urge you not to do it! Here are four reasons why filing your own taxes as a kid is a bad idea.
If you have children who are under the age of nineteen (or twenty-four if a full-time student) and want to file their taxes together, you should do it. It is a question of tax law as to how they file.
The problem
Your kid is off to college. You plan and strive to submit your tax return on April 14th, after collecting all of the necessary papers. Because your child filed their own tax return and received a large refund, the e-filed tax return was rejected. Now you have a problem on your hands. You must seek an extension, prepare an amended tax return and file it by October 15th.
The risks of filing taxes as a minor are significant. If you make an error on your tax return, such as claiming an exemption you’re not entitled to, the IRS will penalize you. You could also face interest and penalties if you don’t report all of your income or if you
A matter of law
The dependency rules and kiddie tax laws are exact, and they must be adhered to. If you have a minor child as defined by the tax code, you’ll need to compute your kid’s taxes based on his or her marginal rate and what will be taxed at a higher rate. The same is true for which tax return receives exemptions and credits.
There’s no need to take unnecessary risks when it comes to your taxes. Let a professional help you file, so that you can be sure everything is done correctly and in a way that minimizes your chances of getting penalized. Trust us – it’s not worth filing your own tax return as a kid!
Suggestions
- Remind your clever children to hold off on filing their taxes until they’ve spoken with you.
- It’s not a choice for a child to claim himself as a dependent; it’s a legal requirement. Remind your kid that there are laws that must be followed before deciding whether or not to declare taxes.
- Make provisions for a dependency shift. Occasionally, moving a dependent from a parent to a student may be financially advantageous. If you believe this is true, do a tax planning exercise before making the transition.
Consider using the tax filing procedure to teach your young adult about the advantages of tax preparation. You never know whether it might save you money and time by correcting an incorrectly filed tax return.
DISCLAIMER: The information contained in this article is for general informational purposes only and should not be construed as legal advice. You should not act or refrain from acting based on any information contained herein without seeking the advice of an attorney.