Crumb Snatcher Taxes
Teresa wants to know when she should concern herself with doing taxes for her children.
QUESTION: Teresa in Texas asks when she needs to worry about doing taxes for her kids. Dave's tax man Norm Rollins gives her the answer.
ANSWER: As a practical matter, the standard deduction is $5,700, so if the kids are going to earn more than that, then that’s really when you start looking at what is going to be taxable. Now, if they are working for you and are under the age of 18, you don’t have to worry about Social Security. You can hire them and if you pay them up to $5,700, they’ll file but the standard deduction wipes out any tax.
Also, if you have dividends and interest and the child is 17 or under, they can file on the parents’ return and there is up to a $1,900 deduction for dividends and interest earned by a child.