Tax Help for HS Student

sameboatFebruary 4, 2012

My son works and is only 17 and in high school. We just did his Federal taxes. He paid $700+ in Federal taxes yet only gets $24 back. Does this sound right? I thought students and teens get all their money back. There was no place on the 1040ez form to indicate he's a student or a minor, etc. Does anyone know if this sounds correct? Thank you!

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LuAnn_in_PA

"I thought students and teens get all their money back."

Why would you think that?
Mine hardly got anything back at that age....

    Bookmark   February 4, 2012 at 1:14PM
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mydreamhome

It's been a long time, but I think it depends on how much he made. If he made under a certain amount for the year, he gets it all back or darn close to it, but if he makes more than that amount, he owes like the rest of us. I've never used them, but H&R block is advertising simple (Read 1040EZ) tax prep for free. It may be worth his while to have them take a look.

    Bookmark   February 5, 2012 at 3:01AM
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lazy_gardens

Calculate it with the regular 1040 and see if that helps.

But there is nowhere that promises you will not pay taxes if you are a minor or a student.

    Bookmark   February 5, 2012 at 5:11PM
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sameboat

Yes, that does make sense. Why would they bother taking any out at all in the first place if he was totally exempt. lol I think when I was a kid I got it all back because I made very little. He does well for a kid his age. So I think the 1040ez is correct. I feel so dumb. Thank you all.

    Bookmark   February 5, 2012 at 11:41PM
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dadoes

Income tax withheld through the year is an estimate and prepayment of the expected tax liability when all is said-and-done ... that is, after all taxable income deductions and credits are calculated. The trick about the tax system is that the gubbermint wants their money before the fact, so tax law requires advance payments. A penalty for underpayment may apply if the balance due on the tax return is excessive ... IIRC, more than 10% of the total tax, although the penalty is waived if the amount withheld is at least equal to the previous year tax (assuming the current year is more).

Employees are given Form W4 to tell the employer how much tax is to be withheld from each check. W4 includes a provision to have an additional $-amount withheld, and has a worksheet to figure extra income (such as savings interest) or a 2nd job or additional dependents, etc.) to figuring the correct withholding. Reductions to withholding are garnered by claiming extra personal exemptions. As I recall, "single with one job and no dependents" allows two withholding exemptions, although most people still claim just one exemption. A withholding exemption is not necessarily one-to-one with dependents, other factors come into play. The filing status (single or married) and number of exemptions claimed via W4 has *nothing* directly to do with what is claimed on 1040. Married people often claim single withholding status to get a higher amount withheld.

Many people purposely have too much withheld so they can "get some back" ... but that's not a gain, they're simply getting a refund of their own money that they allowed the gubbermint to hold for the interim. By handling W4 more correctly, they'd have their "refund" up-front to pay bills and buy things NOW instead of later.

People (such as retirees who don't have earned income, they don't work, living on pensions and retirement savings and interest) or who are self-employed or who don't get paychecks on a regular basis in order to have tax withheld may need to make "estimated" tax payments directly to the IRS. This is done via 1040ES, four times per year (quarterly).

Regards to full exemption from tax withholding, the employEE makes that claim via his W4 if appropriate ... it's not the employER's decision. In fact, the employER is required to get a new W4 every year by end of January from any employee who claims full exemption. If the employee does not provide a new form (even if still claiming full exemption), then the employer must change the withholding to single with zero personal exemptions.

The version of 1040 used (1040EZ, 1040A, or 1040) is determined by various details of the individual's income and deduction situation, not by his age. For example, itemized deductions cannot be done via 1040EZ, and there's a limit how much "unearned" interest income can be reported on it. Estimated tax payments requires full 1040.

I have both a "regular" job and self-employment, savings interest and dividends, IRA deduction, mortgage interest & property taxes & medical costs/insurance deductions. For many years I have been using a spreadsheet to enter income and deductions as they occur and estimate may tax liability using the percentage tables the IRS publishes with Form 1040ES. I am the payroll department at work, so I change my withholding on every check according to what the spreadsheet calculates.

    Bookmark   February 6, 2012 at 7:34PM
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sameboat

Thanks Dadoes! He claimed "0" because my husband and I claim him on our return. I think the 1040ez is correct.

    Bookmark   February 7, 2012 at 8:15PM
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marie_ndcal

Do you have a CPA doing your taxes? If so, have them check his. Most will do it for either nothing or very little.

    Bookmark   February 15, 2012 at 5:16PM
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sameboat

So tonight my husband double-checked my work and as luck would have it, I didn't have anything on line 5. Soooooo...my son actually will get $603 back from Fed! This is more in line with what I originally thought. So DH also did DS's state return and that also is a good number, about $300 back. I don't think I will be doing my own taxes this year.

    Bookmark   February 24, 2012 at 7:31PM
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dadoes

Many people qualify for free online tax prep and e-file. Go to http://www.irs.gov and select a service from the list. Typically one must select a service and follow their link at IRS site to get the free service ... going directly to the tax service's site (TurboTax, TaxAct, etc.) may not be free. After an account is set up at the service and a return started, it can be "paused" (log-out) and resumed/finished later. The same account/log-in with the same service can be used for the next year (but still go through IRS to get started). I've been using TaxAct for four years, always free. Using an online prep service goes far in eliminating math and "line" errors. A preparation wizard asks for the information and numbers via easy-to-understand questions and fills in the forms accordingly.

    Bookmark   February 25, 2012 at 9:00AM
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kirkhall

This post was informative and a little funny to me.

Perhaps the Money Saving Tip here is to have someone else check your math.

    Bookmark   March 5, 2012 at 12:29PM
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jannie

Justin Beiber just turned 18, meaning he was 17 or under all of 2011. Does anyone think he should be exempt from paying US Income Tax? My own daughter is 19, she made about $13,000 last year. She had $1278 withheld from her paychecks. She owed only $378, so she "got back" $900. She was pretty happy. She's saving up for a trip to Florida. Oh, she used the 1040EZ to file...

    Bookmark   March 6, 2012 at 8:26AM
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sameboat

I agree, kirkhall. LOL

    Bookmark   March 8, 2012 at 12:20AM
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