W-2 forms for minors...do you report

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  #1  
Old 02-14-19, 04:24 PM
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W-2 forms for minors...do you report

My son just called and asked if he needs to report income from some photo shots his two young kids had done from Fisher-Price? The w-2's are reported as $50each and taxes have been taken out. Both are solely in the name of the kids.

Should he report this as his income? I told him no. Just forget it and don't even mention it. Even though the gov't took out tax money from the checks, they are not expected to report it as income either as himself or file for the kids.

I'm I correct?
 
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Old 02-14-19, 04:54 PM
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If a W2 was submitted then the Govt has a record and could pursue. If any fed taxes were withheld they will get that back if a return was filed.

Kids income can be added to the parents return and then there is no concern.

Typ income below $600 per year does not generate a W2 so that is unusual!
 
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Old 02-14-19, 05:03 PM
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I think the W-2 is generated for the sake of Fisher-Price and not the recipient. Don't they get some kind of tax relief for each "employee"? If taxes have been taken, then the gov't has their share and no reason to pursue any non-filing (not that it matters because of the amount is so little). And adding it to his tax return doesn't make sense only because it would increase his income and possibly put him in a higher bracket. I also thought that under a certain amount earning do not have to be reported or filed.
 
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Old 02-14-19, 05:45 PM
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Remember, if that $100 increased his AGI, then only that amount above the break point would be taxed at the increased rate, not any of the amount below it. So the taxes he owed on his income before adding in the $100 would remain the same. A couple earning $100k/year AGI might be in the 22% bracket but their effective tax rate is only 13%.

Easy way to figure whether it is worth it is to take the tax held from the $100 and divide by 100 to get you a % rate. If they held more than the tax bracket he's in he'll get some of it back. That being said the amount is probably a few dollars either way and might not be worth the hassle
 
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Old 02-14-19, 08:03 PM
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Dunno... I've filed income tax since I was 14. (it was 1040EZ back then.) I would think it depends whose social security number is on the W-2. If it's theirs, they dont HAVE to file but would want to in order to get the federal and state tax that was taken out back. If its the dad's... well it pretty obviously needs to go on his. And if they aren't going to file... you don't have to.

Tax info for dependent's income: You do not include their earned income on your taxes. If they earned less than $12,000 in 2018, they do not have to file a return, but may wish to do so to recover any withheld income taxes. You can still claim them as a dependent on your return.
 
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Old 02-15-19, 04:27 AM
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XSleepler,

You got it right. My son called and said he found it written on the 1040 form. Don't report it and just forget it.
 
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Old 02-15-19, 04:54 AM
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Yes, but the kids could file and get 100% of the tax back if they wanted to. Otherwise it's a donation to the gov't.
 
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