Tax 2004 Reminder : Tax Return for Your Teenagers

Did your child earn any money, for example, from a mutual fund in
his/her name or by working, say, in college store? Should your child file
a separate tax return?

First thing to check is whether or not you are qualified to claim your child
as your dependent. Irrespective of their income, you can claim any child
as dependent if your child was under 19 at the end of 2004. If he or she
was a student and was under 24 at the end of 2004 then also you can
claim him or her as a dependent. However, for older (25 or above)
children, their individual gross income should be less than $3,100 in
2004 for you to claim them as dependent.

Your child must file a separate return if he or she had earned income
(e.g., wages, salaries, tips) of $4,850 or more or unearned income
(interest, dividend or capital gains) of $800 or more.

Even if their earning was less than the above amounts, it may be good for
them to submit in any case and especially if tax was deducted from their
paycheck or from their profit in sale of some mutual fund or stock. They
may even get a refund in that case. Also, if they have started earning
money, whatever be the earning, it is important for them to realize how
they are progressing in their personal finance and what benefits they are
getting from Uncle Sam. Tax filing could be a good start in right direction
toward their future years of more responsibilities.