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So I am a student in New York City that is 21. My parents have always filed joint with me as dependent (I think, I don't understand any of this jargon/terminology). This summer I had a finance internship in NYC where I made approximately $14,000 and walked home with about $9800 post tax (I think, I don't remember). I'm really confused on how exactly taxes work and what things I need to or what forms I need.
Is 14,000 enough income to file for taxes? Or did I make too much money and have to file for my own taxes? How do I file for taxes? Do I file with my parents or by myself?
Also, I recently just paid $868 dollars in tuition out of pocket. Can that expense reduce the taxes I have to pay? How exactly do I do that? How can I reflect my out of pocket tuition expenses?
What documents or items do I need from my employer and how do I maximize my tax refund.
Most importantly, how do I maximize my refund?
Please advise.
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Yes you have to file your own return. If you are under 24 and a full time student your parents can still claim you no matter how much you make. On your return you need to check the box that says you can be claimed by someone else.
You will get a W2 at the end of the year in January from your employer. Just enter it into Turbo Tax exactly as shown.
Im confused. how can I file for my own taxes if my parent can claim me as an independent? Also, doesnt me being claimed significantly reduce the refund I get?
the company i work at pro-rated the $14,000 i made at approximately $63,700. Does that mean I can get a good tax refund or a small one? Would filing with my parents help me or not benefit me?
What form do I need to file out to fill it out independently?
So I am a student in New York City that is 21. My parents have always filed joint with me as dependent (I think, I don't understand any of this jargon/terminology).
Only married people can file a joint return. Your parents claimed you as a dependent on your parent's joint return. (Assuming your parents are married to each other and did file as married filing joint, as opposed to married filing separate.)
This summer I had a finance internship in NYC where I made approximately $14,000 and walked home with about $9800 post tax (I think, I don't remember). I'm really confused on how exactly taxes work and what things I need to or what forms I need.
Whoever the employer/contractor was that hired you will send you the appropriate tax reporting documents at tax filing time. They have until Jan 31, 2020 to put them in the mail to you.
Is 14,000 enough income to file for taxes? Or did I make too much money and have to file for my own taxes? How do I file for taxes? Do I file with my parents or by myself?
There is no monetary limit that would would refer to as "enough". You could earn $1 and file a tax return if you wanted to - though for $1 you wouldn't be legally required to. Basically, as a single person if you earn less than $12,000 during the tax year then you are not required to file a tax return. However, if the employer withheld taxes on that income then you might "choose" to file a tax return in order to get those withheld taxes refunded to you.
Also, I recently just paid $868 dollars in tuition out of pocket.
The deduction for out of pocket qualified education expenses expired at the end of 2017. Congress did not renew the deduction for the 2018 tax year, and chances are they won't for the 2019 tax year either. But if they do renew that deduction, you don't qualify to take it. That's because you *QUALIFY* to be claimed as a dependent on your parent's tax return. It doesn't matter if they actually claim you as a dependent or not. If you "QUALIFY" as their dependent, then you don't qualify for the deduction. (Unless congress were to change that in the law, of course.)
How can I reflect my out of pocket tuition expenses?
Unfortunately, the way the laws are on this right now, you can't.
What documents or items do I need from my employer
Depends on if you were hired as a W-2 employee, or a 1099-MISC contractor. But either way, they are required by federal law to send your your tax documents by Jan 31, 2020.
Most importantly, how do I maximize my refund?
You have nothing to "maximize" here. Your first $12,000 of earned income is tax free. The remaining $2K (give or take) will only be taxed at 10% - the lowest tax bracket. The only possible way to reduce it more is to donate that remaining $2K to a qualified charity, and 50% of your donation will be tax deductible.
Now if this is "truely" earned income, you can open a traditional IRA and with $14K of earnings if you can contribute a maximum of $6,000 to a traditional IRA and not pay taxes on that contribution. But first you should read https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras-contributions to make sure limits below the maximum contribution amount allowed don't apply to you.
As a reminder, when you complete your 2019 tax return in 2020, you ***MUST*** select the option for "I can be claimed on someone else's return". You don't have a choice here. But your parents do have a choice to claim you or not. For you, if you just *QUALIFY* to be claimed on someone else's tax return. (and I'm 100% sure you do) then you must select the aforementioned option on your tax return. (This is assuming you did not graduate before May 1st, 2019. If you graduated on or after that date, that may or may not change things.)
I actually don't follow whatsoever. So let me provide some more context/ask some more questions.
I said they will send you a W2 form in January. And you didn't pay taxes, you had tax withholding taken out. The withholding is just an estimate on how much tax you will owe on your total income.
You enter the full gross income into your tax return.
Then you get to subtract a 12,000 Standard Deduction
That gives you your taxable income
The Tax is calculated on your taxable income
Then you subtract the federal withholding to give you a Refund or more Tax Due.
Everyone gets a Standard Deduction. Which means the first 12,000 of income is tax free.
So if you only made 12,000 you would get all your withholding back as a refund. But you made 14,0000. Subtract the 12,000 Standard Deduction and only 2,000 is taxable.
ps.....we are not addressing the mandatory taxes taken out of your paychecks. In addition to the federal and state withholding taken out they also take out FICA. FICA is Social Security and Medicare taxes. You pay 6.2% Social Security and 1.45% for Medicare. Those you don't get back.
When you fill out your tax return watch for this question under My Info.
You can have a refund Direct Deposited by entering your bank account number and routing number on your return.
If you only have employee wages on a W2 you can use the Free Edition. The Online will open in December here, https://turbotax.intuit.com/personal-taxes/online/
Sorry more info......after you fill out a tax return the IRS will open filing probably in late January. Oh, you will be filing a 1040 form tax return. It is due by April 15. If you don't have all your tax forms ready you can get a 6 month extension until Oct 15. You have to file the extension form 4868 by April 15. Even if you get an extension if you end up with a tax due the payment is still due April 15 or the IRS might charge you interest.
so I'm super confused and don't understand a single thing one bit at all.
You file your own tax return separately from your parents. You can file before them and with another company. Your return is completely separate from theirs. You just have to check a box on your return saying you can be claimed as a dependent.
If you make 12,000 or less of W2 income you should not owe any tax and should get a refund of all the withholding. If you get a 1099Misc instead of a W2 that is taxed differently. We think you will be getting a W2 for your Wages, ask your employer.
so I'm super confused and don't understand a single thing one bit at all. May I suggest you talk to your parents ... they should be able to help you understand.
ALSO ... no matter what the buzz is at the school ... you are NOT eligible for any of the education credit ... that is a myth so do not get sucked into that scam.
Just wait until the end of the year and you get your tax form W2 for your income. Then enter it into Turbo Tax and ask us your questions then. You can't do anything until you get your W2 and any 1099 forms. You might get a 1099 for any interest you receive from bank accounts or investments.
A W2 looks like this.https://www.irs.gov/pub/irs-pdf/fw2.pdf
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