Important for Nevada teens to understand IRS obligations
While many working teenagers do not make enough money in a given year to be concerned about owing taxes, others do fall within a tax bracket. As Nevada residents are keenly aware, it is the responsibility of individuals to ensure their debts to the IRS are paid in full. Teenagers are no exception to the rule, so it is important they understand their obligations regardless whether they are paying into income tax or not.
Generally speaking, children under the age of majority can make up to $6,100 without being taxed as this total equals the maximum standard deduction to which they are entitled. It is important for young people filling out their first W4 to tell employers not to withhold federal taxes in order to avoid having to fill out a return later. It may also be beneficial for young people to learn about tax-free fund like a Roth IRA, where they can begin saving for their future.
Young people who make money in a freelance capacity, as in babysitting or landscaping, are required to declare their income if they make over $400 in a fiscal year. While the amount is not enough to qualify for income tax, Social Security and Medicare taxes will have to be deducted. Finally, teenagers working for tips must remember that gratuities are taxable according to the IRS, so a record should be kept of how much is made in this way throughout the year.
Tax time is stressful — most Nevada residents will agree with this point. It is important for young people to learn early how to stay on the “good side” of the IRS by fulfilling their tax obligations. Learning these skills early will promote good habits and make tax time in their adult years more manageable.
Source: gosanangelo.com, Some working teens face tax obligations, Tim Grant, Aug. 25, 2013
