tax question

[Katie]

My daughter who is 17 made 8010.00 in 2009 working at Target. Target only took out 220.00 in federal withholding.
I am claiming her on my taxes. I believe she owes the IRS over 600.00....my fellow workers..do not.

If i am claiming her..she can not claim herself, thus losing the exception..correct? I think the number is so large due to the Obama tax laws he changed in April....anyway...
I know it's a generic question...but 8000 made, 220 taken out for federal taxes....17 yr old

What do you guys think?

 

[SOnotLayuh]

You'd be surprised at how little they take out for young dependents. As a teenager there were maybe two years that I made around that amount and that's what they took out - and I still always managed to get just about every penny paid in tax refunded. Do you know if she claimed one or zero on her withholding?

She will still have to file separately from you, so sit down with her and make sure everything is filled out properly if she's never done it before

 

[tar heel]

She owes taxes b/c her withholding is wrong. 8,000 is a pretty good income for a teen and it's all taxable since you are claiming her (and I'm sure that is worth more to you than it would be for her). It looks like she is roughly in the 10% bracket. One of my kids made less than that last year and had to pay state tax.

BTW, I've always told my teens to claim 0 exemptions on their W-4. The amount of taxes she had withheld suggests she is claiming 1 (or even 2). She will want to adjust that, of course.

Why do your co-workers think she doesn't owe anything? Do you have state tax also?

ETA: I hate when people erase their posts, so I'll leave this and let everyone know how dumb I am! I really do know better, I promise.

 

[Katie]

i know it's hard to believe..but it says single and 0 on the top of her paycheck stub.

The year before , it was exactly the same and she got money back...i really think it's because of the "pay stimulus" Obama gave us starting April.

in 2008, she made 3700 and paid 202 in federal withholding..same W4 form!

It kinda tough for a 17 year old to come up with 600.00....ugh!

 

[Jeninindy]

My son made $4400 at his part time job this year - he owed nothing in federal taxes and is getting a refund. He had tax free college scholarships. We claim him as a dependent.

Did you run the numbers through one of the free sites to see what it comes out to be?

 

[msmayor]

Actually, all $8,000 is not taxable. While your daughter does not get to use a personal exemption because you are claiming her on your taxes as a dependant, she still gets to take the standard deduction of $5,700. Her taxable income should only be in the range of $2,300, taxed at the lowest bracket of 10% means her tax should come to about $230....only $10 less than what was withheld.

 

[tar heel]

I feel stupid for forgetting about the standard deduction -- thanks Ms. Mayor.

Katie -- do you think she may have omitted the standard deduction? I sure hope so!

 

[hearingaidmom]

Actually, all $8,000 is not taxable. While your daughter does not get to use a personal exemption because you are claiming her on your taxes as a dependant, she still gets to take the standard deduction of $5,700. Her taxable income should only be in the range of $2,300, taxed at the lowest bracket of 10% means her tax should come to about $230....only $10 less than what was withheld.

This is the correct answer (from a CPA who needs to be at work but is at home with a sick kid).

 

[Jeninindy]

Ran it through Taxcut real quick and it shows she will owe about $11 - that is without her claiming herself as a dependent too.

 

[Cheshire Figment]

Ran it through Taxcut real quick and it shows she will owe about $11 - that is without her claiming herself as a dependent too.

I agree with this. I just ran it through TurboTax ProSeries. She is entitled to a $5,700 standard deduction but no exemption. This means she has %2,310 of taxable income and the tax is $231. Since $220 was withheld all she will owe is $11.00.

I don't know what effect State Income taxes may have, but it should be similar.