Unofficial Tax Time Tips

irsIf your kids have part time and/or summer jobs and you know they’ll make less than the minimum standard deduction*, do them and yourself a favor and see if they can specify that they are exempt from withholding on their W-4 so no taxes are deducted from their paychecks.

Assuming their tax situation is simple (eg. minimal or no taxable interest, no capital gains, etc.) and you know they’ll have no tax liability, they can avoid having to file a return just in order to get back any taxes withheld. I forgot to tell one of our sons to say he was exempt as soon as he started a job in 2012, and we had to file a return to get back $25 federal and $12 state tax. Such a pain!

Officially, I don’t think you’re allowed or supposed to say you’re exempt if you earn more than $950 or you can be claimed as a dependent. This seems like a bunch of bunk. The government withholds taxes and then you’re forced to file a return in order to get the money back. A) they get to keep your money for months on end, and B) they’re probably hoping you won’t bother filing a return to get it back. That’s the conspiracy theorist in me talking. 😉

Anyway, you can always try to save yourself some time/trouble. It’s worked for us in the past – but only when I remember to tell the kids before they get that first paycheck…

* in 2013 this is something like $10,000 if they can’t be claimed as a dependent and $6,100 if they can be claimed as a dependent. Remember, I’m not a tax authority!!

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