Teenager Started a Job - What is Best Exemption to Claim?

Ask Paywizard.org - My teenage daughter just started a job, what is the best exemption for her to claim? Paywizard.org answers.

Question - Date: 2009


My teenage daughter just started a job, what is the best exemption for her to claim to expect the best end of year return?


Answer Paywizard.org

Thanks for your email. Paywizard does have a section income tax on the website, but we're salary experts, not tax experts. We'll try to answer you as good as we can and refer you for more information to tax experts.

As far as we know, your teenage daughter, as being a dependent, should file her own taxes for the 2009 tax year if she has an earned income of more than $5,700.-. She should also file her own taxes if she has an income over $950 and $300 or more in unearned income like dividend or interest.

If the above is applying for your daughter she could claime as Single without allowances. According to a Yahoo tax specialist this will ensure sufficient tax withholding if her income goes over the $5,700 limit. And if her wages are a lot lower, it wouldn't trigger any withholding anyway, so claiming exempt would change nothing and by claiming as Single she would avoid penalties if she would earn a lot more after her filing on April 2010. If you daugther only earns about $3,000 without a previous tax liability she can safely claim exempt, says this specialist. 

If your daughter has only interest plus dividends plus other investments income more than $1,800 part of her income will be taxed at your tax rate instead of hers. 

Check for all the information the Yahoo tax expert and the IRS Child Investment Income, and the Child Tax Credit, and IRS publication 501 about dependents and qualifying child. 

If you have more questions, please contact your local IRS office.