Part-Time Income Taxes: Check Threshold Tax Amount For Teens

With the advancement in society, several teenagers indulge in part-time jobs to complement their education. However, they face a severe dilemma about paying taxes for their part-time income. The teens need to pay taxes based on their age and income amount. Parents need to be aware of the tax rates and income figures to avoid legal roadblocks. GO BankingRates reports that teens with an annual part-time income of more than $12,250 will have to pay taxes in 2022. The majority of the part-time teen worker is unlikely to cross the threshold even for most high-paying jobs.

Part-Time Income Taxes: Check Threshold Tax Amount For Teens.

Teenagers Earning Above The Threshold Need To File Returns

The teens earning more than $12,550 will have to consider the W-2 form to receive details for tax filing. IRS taxes the cash rewards for teens in several public activities; it considers the dividends taxable income. The parents need to provide complete details of cash rewards. IRS requires the teenagers to provide earning points to the employer to claim Social Security and Medicare taxes. The deadline for 2021 tax filing is April 15; individuals must file the returns before that date to ensure a smooth process. The taxpayers can visit the online IRS portal to get detailed information regarding the refunds and additional tax policies.

Stock Profits Are Also Taxable

The teenagers eligible for tax refunds should file their taxes despite not reaching the threshold income limit. After examining the data, the IRS will compensate the eligible teen filers; teenagers can use a free e-file service to file the returns. The stock profits also come under the taxable income. Teenagers with gains from stock holdings should include accurate tax returns. Supplementary investments also form a part of the taxed income. GO BankingRates reports that the total part-time income and investment profits exceed the total earned income by $350; filing returns is necessary despite not attaining the threshold income limit.

Parents need to check with teens to derive complete income information avoid any legal action. The government should release exclusive programs to educate teens regarding the tax regulations and the threshold annual earnings. Families should take help from tax professionals to file their tax returns accurately.