If your high school or college aged child needs to file a tax return only to have federal or state income taxes withheld from their pay refunded, then why not file for free? For federal taxes, this applies to dependents who earned no more than $6,300 (in 2016) unless they also have investment income exceeding $350.
Even if your child earns more than $6,300, if the only income is from W-2 wages, then please take advantage of the free filing. Just be careful to make sure that you indicate that the child can be claimed as your dependent on their return.
While preparing your child’s tax returns, please consider contributing the lesser of your child’s gross wages, or $5,500, into a Roth IRA for your child. Think decades of tax-free compounded growth on those contributions.
If a child is filing a tax return ro report significant investment income, however, the overly complex Kiddie Tax rules should deter most parents from trying to file for their kids using the free software.
If you do have a working child and that child won’t earn more than $6,400 in wages during 2017, please instruct your child to claim Exempt on Line 7 of the W4 form to avoid the need to file a tax return for that child.
Please also share these great resources with your working child:
- Article: Summer Job Alert: Have Your Working Children Claim “Exempt” on Their W-4 Forms
- Video: W-4 Basics: Kids and College Students Earning Less Than $6,300 Should Claim Exempt (2 minutes)
- Video: Help Working Kids and Students Correctly Complete a W-4 Form (6 minutes)
And here is the information form the IRS regarding filing simple tax returns for free:
Use IRS Free File Software on Smart Phones or Tablets
FROM IRS NEWS: IR-2017-21, Feb. 2, 2017
WASHINGTON – The Internal Revenue Service today announced that taxpayers now may use their smart phones or tablets to electronically prepare and file their federal and state tax returns through IRS Free File.
The IRS and its private-sector partners who offer their brand-name software products for free now support a new design that allows for the use of desktops, laptops, mobile phones and tablets.
You may access the products using mobile devices in two ways: (1) Use the IRS app, IRS2Go, which has a link to the Free File Software Lookup Tool or (2) use the device’s browser to go to www.IRS.gov/freefile and select the “Free File Software Lookup Tool” or “Start Free File Now” to find the software product that matches your situation. The IRS2Go app is available for Android and iOS devices.
Taxpayers with adjusted gross income of $64,000 or less will find one or more free software options. Each of the 12 software providers set the eligibility requirements for their product, generally based on age, income or state residency. The Free File Software Lookup Tool asks a few questions to help you identify the appropriate software products.
Some partners offer free federal and free state tax return preparation; some charge a fee for state return preparation. Active duty military personnel whose income was $64,000 or less are exempt from any eligibility requirements and may use any Free File product they choose to file their federal return for free.
The Free File software allows for free electronic tax preparation and filing and direct deposit of refunds. Some taxpayers may need their 2015 adjusted gross income if they filed a return, in order to validate their identities and complete the electronic filing process.