helping my 21 y/o with taxes - does he even need to file?

Submitted by No_Knowledge_5885 t3_11dlkbd in personalfinance

TL; DR: what happens if I just don't file since it's under the income minimum?

Every year, I've done my taxes, and as my son (now 21, full time college student) received W2s, did his taxes as well. I'm divorced, file as HOH, claim him as a dependent. In 2022, earned less than $8K. I started to do his taxes through TurboTax last night, and it was showing he was going to owe money. A coworker pointed out that his income is less than the $12,950 minimum income, so he doesn't even need to file. Which means any time I did it in the past was probably not necessary either, although he'd receive refunds back (not large amounts, but enough to be helpful for him).

So... since I started to file, but haven't completed the process... can I just not? Should I just delete out any of the W2 information I had input for him? I tried to ask Turbo Tax online for help, and the chat is really for "technical assistance." I could upgrade to a different plan (i.e., pay for their advice) but I don't really think that's necessary either. Any advice?

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Levertki1 t1_ja9c7tw wrote

Since you’ve claimed him, his taxes start at a lower level. He needs to file.

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Werewolfdad t1_ja9bxjb wrote

Why was he going to owe money?

Was he self employed?

Did he have unearned income?

If he is below the filing requirement he essentially can’t owe, so there’s something going on

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No_Knowledge_5885 OP t1_ja9cbnh wrote

He worked for a nonprofit organization last summer, who paid him $3K, but did not withhold anything. That's the only thing I can figure out why it was showing he'd owe something? They sent him a 1099-NEC (I think is the form? I'm at work currently and left the information at home)

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sleepyguy22 t1_ja9cl0y wrote

1099-NEC means he was self employed, and thus owes payroll taxes (i.e. social security & medicare) on his earnings. That's separate from income taxes, which he owes nothing.

File and pay the tax, otherwise the IRS will be sending a letter sometime in the next 12 months asking for their share, plus interest.

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Werewolfdad t1_ja9cv6t wrote

Man you guys are quick

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sleepyguy22 t1_ja9dl1g wrote

Right back at you on most of the posts here! :) I always am relieved when you and DeluxeXL concur with my advice and I haven't completely butchered my understanding of taxes.

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Jmb3930 t1_ja9e5et wrote

Her would owe at least the payroll taxes (SS and Medicare) since he made more then $400 he has a filing requirement

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Werewolfdad t1_ja9crxv wrote

1099-NEC is for a contractor, I.e. self employment.

If he has more than $400 in net self employment income he has a filing requirement.

Whether he should have been an employer is another issue.

Was that his only income? Where’s the other $5k from?

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No_Knowledge_5885 OP t1_ja9dx4d wrote

his work study job at college and about $2K he made working at Walmart.

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DeluxeXL t1_ja9cn06 wrote

That's a self-employment income. The threshold to file when SE income is present is $400.

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irishkathy t1_ja9pdl4 wrote

If he worked as 1099 (self employed) he would file schedule C and can deduct expenses. (Did he need a computer, software, cell phone, mileage, etc)

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sleepyguy22 t1_ja9c3b7 wrote

If he has no tax liability anyway, (e.g. he made less than the standard deduction of 12,950) then there's no requirement to file. However, if he had any federal income tax withheld from his paycheck, it makes sense to file to get that money back. However, instead of paying turbotax, use something free like freetaxusa.com

But you're saying that the tax screen showed he does owe taxes. Maybe a 1099, and he owes some FICA taxes?

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iccebberg2 t1_ja9c873 wrote

There's usually local services that provide free assistance/advice from certified tax preparers. You might want to check with them and see what they have to say

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DeluxeXL t1_ja9c8jw wrote

If your son only had employment income, no business (including self-employment) income, no interest/dividend/capital gain/invesment income, and the total income was less than $12,950, he doesn't have to file unless he wants to get the tax withholding refunded back.

However, if he owes money, the above cannot also be true. One of the above must be false.

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No_Knowledge_5885 OP t1_ja9efne wrote

He was an actor for a summer theater group - that's where the $3K came from. They sent the 1099 NEC, which I guess means he has to claim it as self employed income? I'd never seen one of those forms before, which is why I'm confused.

I'll find a local tax person to help me - I thought this was something I could figure out online, but as it's a new area to me (taxes are just NOT my expertise) I'll consult someone to make sure it's done right.

Thanks for all the quick responses -- this is helpful.

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MyNameIsVigil t1_ja9i8vp wrote

He doesn’t have to file, but there’s no harm in doing so because the cost is nothing more than a few minutes of time. It’s recommended that you file even if you don’t meet the minimum income because any potential government stimulus programs will use that filing information to distribute money. It’s good to have a filing record even if you don’t owe anything, and it’s a good opportunity to teach him how to file taxes.

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