Does my daughter have to file her tax if her income is less than $10000? How shall I file tax as MJF and claim her as dependent?

[danilol]

My daughter has a income of $7175 in year 2021. Since both federal and state hold her tax in W2 already and her income  is lower than $10000 and my husband and I want to claim her as dependent. So she chose to do not file tax, is that OK?

When I file tax with my husband (MFJ) and claim our daughter as dependent shall we add daughter's income  in adjusted gross income or not? 

[xmasbaby0]

You have not mentioned your daughter's age or whether she was a full-time student in 2021.   That is important information that can determine whether you can claim her as your dependent.   If she was 19 or older at the end of 2021 and was NOT a student, you cannot claim her.    If she was a student and was under the age of 24 at the end of 2021 then you CAN claim her.    And even if she files a tax return to seek a refund of tax withheld, you can still claim her IF she was a student, no matter how much she made.

No, you do not add her income to your own tax return. 

 Here is some more information:

MY DEPENDENT HAD A JOB

If your dependent has a W-2 for his after-school job, summer job, etc. you do not include the information on your own return. You can still claim your child as a dependent on your own return.  He/she can file his own return for a refund of some of his withheld wages (he won’t get back anything for Social Security or Medicare), but MUST indicate on it that he can be claimed as a dependent on someone else’s return.  (Supervise this closely or prepare it for him!)

If your dependent’s earnings were over $400 and were reported on a 1099Misc or 1099NEC then he must file a return and pay self-employment tax for Social Security and Medicare.

You might also want to use free software from the IRS Free File versions:

https://apps.irs.gov/app/freeFile/

IRS interview to help determine who can be claimed:

https://www.irs.gov/help/ita/who-can-i-claim-as-a-dependent

There are two kinds of dependents---qualifying child and qualifying relative.   Your daughter might be your qualifying child depending on her age and on whether she was a student.  She earned too much to be a qualifying relative.

WHO CAN I CLAIM AS A DEPENDENT?

You can claim a child, relative, friend, or fiancé (etc.) as a dependent on your 2021 taxes as long as they meet the following requirements:

Qualifying child

• They're related to you.
• They aren't claimed as a dependent by someone else.
• They're a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.
• They aren’t filing a joint return with their spouse.
• They're under the age of 19 (or 24 for full-time students).
• No age limit for permanently and totally disabled children.
• They lived with you for more than half the year (exceptions apply).
• They didn't provide more than half of their own support for the year.

Qualifying relative

• They don't have to be related to you (despite the name).
• They aren't claimed as a dependent by someone else.
• They're a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.
• They aren’t filing a joint return with their spouse.
• They lived with you the entire year (exceptions apply).
• They made less than $4,300 in 2021.
• You provided more than half of their financial support.

When you add someone as a dependent, we'll ask a series of questions to make sure you can claim them. There may be other tax benefits you can get when you claim a dependent.

[VolvoGirl]

How old is she?  If she was under 19 you can claim her.   She can file her own return to get back the federal and state withholding.  W2 boxes 2 & 17.  Be sure on her return she says she can be claimed on someone else's return.   

You don't include their income on your return. It would only go on their return if they are required to file one.  They don't have to file if they only have Social Security or W2 income under 12,550 but can file to get back any withholding taken out in boxes 2 or 17.  But you don't get boxes 4 or 6 back.   If they got a 1099NEC for it they do have to file a tax return for it.

To file a separate return for a dependent in the Online version you need to set up a new account separate from yours.  Online is only good for one return per account.  You can use the same email address for 5 accounts.  You can probably use the Free Edition

Https://ttlc.intuit.com/questions/1894512-how-do-i-start-another-return-in-turbotax-online 

Be sure on the dependent return you check the box that says you can be claimed on someone else’s return.  If their only income is W2 and under 12,550 they do not have to file a return except to get back any withholding taken out.

Filing requirements for a dependent

https://ttlc.intuit.com/community/children-dependents/help/do-i-need-to-file-my-own-taxes-if-i-m-a-d...

[NCperson]

@danilol = I am going to assume this child is a full time student under the age of 24. 

1) NEVER comingle her income with yours'.  It always requires a separate tax return

2) the fact that she earned money doesn't change the way you complete your tax return.  You claim her like you always did

3) The IRS rule is that if soneone's W-2 earnings are less than $12550 (2021)  they  are not required to file.  HOWEVER, if you want to get back the federal withholdings, then you need to file.  Same goes for the State (although the earnings minimum may be different). if the earnings are on a 1099-NEC (contractor), then there is a filing requirement beginning at $400 of income.  

4) when the daughter completes her tax return, there is a check box asking whether someone else CAN claim here.  THat has to be checked for tthe return to be correct

IF she is NOT a student, even if she lives with you and you are paying all her living costs, you cannot claim her on YOUR taxes since she earned more than $4300 (2021).  Her filing rquirement is the same, but she doesn't check the box stating someone else CAN claim her,

[Hal_Al]

You do not report his/her income on your return. If it has to be reported, at all, it goes on his own return. If your dependent child is under age 19 (or under 24 if a full time student), he or she must file a tax return for 2021 if he had any of the following:

1.          Total income (wages, salaries, taxable scholarship etc.) of more than $12,550 (2021).
2.          Unearned income (interest, dividends, capital gains, unemployment, taxable portion of 529 distribution) of more than $1100.
3.          Unearned income over $350 and gross income of more than $1100
4.          Household employee income (e.g. baby sitting, lawn mowing) over $2300 ($12,550 if under age 18)
5.          Other self employment income over $432, including money on a form 1099-NEC

Even if he had less, he is allowed to file if he needs to get back income tax withholding. He cannot get back social security or Medicare tax withholding.

In TurboTax, he indicates that somebody else can claim him as a dependent, at the personal information section.

[danilol]

She is 21 years old and she is a full time student. So I can claim her as my dependent.

She got w2.

In my tax returen I did not add her income  which is correct as you mentioned.

She did not file her tax to get the withholding back because she  thought that once her parent's claim her as dependent then she can not file her tax seperatly to take the holded tax back.

That means she paid unnecessary tax to the goverment, right?

Can I also understand the $12550 is the threshold that people start to own tax to the goverment? There is no tax should be owned under $12550, right?

Thanks

[xmasbaby0]

@danilol Your daughter can file a tax return to seek a refund for amounts that are in box 2 of her W-2 or box 17 of her W-2.  Box 2 shows federal tax withheld; box 17 shows state tax withheld.   She can do this even if you claimed her as a dependent.   But she MUST say on her own tax return--in My Info-- that she can be claimed as someone else's dependent.

The amount of $12,550 is the standard deduction for a single person who is NOT being claimed as someone else's dependent.   If she can be claimed as a dependent then her standard deduction can be lower than that amount.   She may or may not get back all of the amounts from box 2 or box 17.   She will not get back any of the Social Security or Medicare that was withheld.

The standard deduction amount for an individual who may be claimed as a dependent by another taxpayer cannot exceed the greater of $1,100 or the sum of $350 and the individual’s earned income (not to exceed the regular standard deduction amount).

It sounds like she was a W-2 employee.    She is not  "required" to file a tax return if she earned less than the standard deduction amount of $12,550, but if she does not file a tax return, she may be just giving up money that she could get back.   Young adults (and older ones too) usually like to receive money, so she has a good reason to file a tax return to seek a refund.

If she ever works as an "independent contractor" then she would be required to file if she earned even $400; the criteria and filing requirements are different for W-2 employees and independent contractors.

[NCperson]

@danilol 

<<She did not file her tax to get the withholding back because she  thought that once her parent's claim her as dependent then she can not file her tax seperatly to take the holded tax back>>

as discussed above, not true....and she can file through April 18, 2025 to get the refunds.....

 <<That means she paid unnecessary tax to the goverment, right?>>

well, she has withholdings that the IRS is holding...she can get it back

<<Can I also understand the $12550 is the threshold that people start to own tax to the goverment? There is no tax should be owned under $12550, right?>>

technically, if you are a W-2 wage earner filing single, and earn under $12,550, the tax is zero.  For 2022, under $12,950, there is no tax.  The threshold is different for different filing statuses and also different if you are a contractor and receive a 1099-NEC

Note also that the state tax threshholds may be different. 

[xmasbaby0]

Oh----and there is no penalty for filing after the deadline if you are getting a refund, so she has no problem in that regard.   Help her prepare and file a 2021 tax return to get a refund.

[danilol]

She can claim that refund in how many years? 3 or 5 years?

[SweetieJean]

She may still owe state taxes though, as state tax laws differ from Federal (and from state to state).

[NCperson]

@danilol - 3...... if you are due a refund, the IRS permits you to claim that refund for 3 years beyond the original due date of the return, so since the return was due April 18, 2022, she has until April 18, 2025 to file the return and claim the refund. 

[danilol]

I am a little confused.

My daughter W2 income is $7175, there are both federal and state withheld. We claimed her as dependent.

Does she have to file her tax seperatly even she choose to give up taking back withheld?

she is 21 and full time student.

[danilol]

Any difference between 1.total income(  wages, salaries, taxable scholarship etc.) of more than $12,550 

                           and 3. gross income of more than $1100?

what does  gross income refer to here? is it wages salaries, taxable scholarship?

Thanks

[xmasbaby0]

@danilol Yes.   She files her OWN tax return to seek a refund.   Her tax return has nothing to do with your own tax return.   She can use the online Free Edition to prepare a tax return.   The amount of federal tax withheld from her pay is in box 2 of her W-2; the amount of state tax withheld is in box 17 (if you are in a state that has state income tax.)   She can e-file both federal and state tax returns.

Again it does not matter that she missed the April filing deadline.   She can e-file a 2021 tax return anytime before mid-October of 2022.   If she waits past October to prepare and file it, she will only be able to file by mail, so the sooner the better---and the sooner she can get her tax refund.