topic Dependent Tax Return - why does he owe $$$ in State tax filing

Dependent Tax Return - why does he owe $$$

neef — Mon, 09 Mar 2026 08:09:18 GMT

My son's AGI is 15k. But he "owes" both federal and NJ.

Why?

Is this because his non-W2 wages were above a certain amount? He collected unemployment and earned income paid under a 1099B/1099DIV/1099MISC.

Line 1 5k

Line 7 2k

LIne 8 7k

Re: Dependent Tax Return - why does he owe $$$

SweetieJean — Sun, 13 Mar 2022 19:11:16 GMT

earned income paid under a 1099B/1099DIV/1099MISC

Please clarify. Earned income is not reported on those forms. Do you mean unearned income?

How old is your dependent? The Kiddie Tax might be coming into play.

Re: Dependent Tax Return - why does he owe $$$

neef — Mon, 14 Mar 2022 12:42:38 GMT

I don't know what the difference is between "earned" and "unearned"? I just know he received 1099s

He is 19

Re: Dependent Tax Return - why does he owe $$$

DoninGA — Mon, 14 Mar 2022 12:46:24 GMT

@neef wrote:

I don't know what the difference is between "earned" and "unearned"? I just know he received 1099s

He is 19

Unearned income is income from interest, dividends or capital gains from investment sales. Earned income is from wages received from an employer reported on a W-2 or income earned from self-employment reported on a 1099-NEC, 1099-K or cash.

If he has income reported on Form 1099-INT, 1099-DIV or 1099-B that income would be unearned income.

Re: Dependent Tax Return - why does he owe $$$

SweetieJean — Mon, 14 Mar 2022 13:48:40 GMT

Was he age 19 on 12/31/2021?

Re: Dependent Tax Return - why does he owe $$$

neef — Mon, 14 Mar 2022 15:18:50 GMT

Yes.

Re: Dependent Tax Return - why does he owe $$$

neef — Mon, 14 Mar 2022 15:20:59 GMT

I understand now.

So what does that mean for tax purposes? Is he taxed on the unearned income because it's over a certain amount?

Re: Dependent Tax Return - why does he owe $$$

JohnB5677 — Mon, 14 Mar 2022 16:09:16 GMT

I do understand that your son is 19 years old. That is of no consequence from a tax point of view. The amount of money and the type of money he received is of greater concern.

All of the money you described would typically not have any taxes withheld from it. So if he did have a tax obligation, there wouldn't be anything to cover it.
For a single taxpayer, the standard deduction is $1,100. If he exceeded this income level he will incur taxes.
Finally, you stated that he received a 1099-MISC. This is considered self-employment and is subject to an additional 15.3%.tax.
- The rate consists of two parts: 12.4% for social security and 2.9% for Medicare.
- This tax is imposed regardless if he owes any other tax.
However, if it is appropriate it can be avoided.

You are not self-employed, but TurboTax thinks you are because of the way you entered it on your return.

Wages & Income
Scroll to Other Common Income
Select Income from a 1099-MISC
Post your information from the form [Continue]
Describe the reason for this 1099-MISC
Post XXXX
Does one of these uncommon situations apply? = Select None of the above
Did the XXXX involve work that's like your main job? = No
How often did you get income for XXXX? = Check Got it in 2021
Did the XXXX involve an intent to earn money? = Answer No

@neef

Edited 03/14/2021

Re: Dependent Tax Return - why does he owe $$$

Hal_Al — Mon, 14 Mar 2022 15:37:16 GMT

Q. My son's AGI is 15k. But he "owes". Why?

A. Why do you think otherwise?

The maximum standard deduction is $12,550. 15,000 - 12,550 = $2450 taxable income.

But, dependents don't always get the full $12,550 standard deduction. A dependent's standard deduction is the greater of $1100 or his earned income + $350, but no more than $12,550. Based on the numbers you provided, he gets a standard deduction of $5350. 15,000 - 5350 = $9650 taxable income. The $2000 long term capital gain will be taxed at 0%.

Follow the flow on form 1040. The tax calculation for the amount on line 16 will be shown on the "Qualified dividends and capital gains worksheet.