how a teen file taxes?

Question

i work for a family business and im under 20. i live at home and all, but i get paid around 3000 a year just for little things i do for the business. how would i go about filing this for my taxes... and yes i have to becuase i opened an IRA last month based on some of that money.. do i just go to a tax dude and tell him my situation or what? thanks

Answer 1

First of all, if your income is only from your job and you will earn less than $5,150 of wages reported on a W-2, then you are not required to file a tax return. You could just open the Roth IRA and make contributions up to $4,000 or your earnings, whichever is less.

However, to establish that you did have the income required to contribute to a Roth, it would be a good idea to file a tax return. You would be required to file a tax return if your business did not give you a W-2 (they gave you no document, or they gave you a 1099MISC).

I assume the payment you receive from the business is your only income. You can have someone do your return, but it would be a good idea to learn how to do it yourself, and it isn't hard.

The business owner will give you an income document, either a W-2 or a 1099MISC. The document will be produced early in 2008.

The financial institution you opened your IRA with will provide you with a document showing your IRA contribution. This is a 1099R.

You can do this by hand or use commercial software. If you get a 1099MISC instead of a W-2, get some software because there are extra forms and schedules to deal with and the software will do it for you. If you do this by hand, get yourself Publication 17 from the irs.gov website or from your local IRS office.

You will fill out Form 1040A or Form 1040 (you cannot use the shorter 1040EZ). Just enter the data from the W-2 or 1099MISC and the 1099R. From the information you have provided, you will owe no tax and you will record your IRA contribution.

I hope you opened a Roth IRA, the traditional IRA does not benefit you since you owe no income taxes with or without the IRA.

Answer 2

The family business should issue you a W-2. If they don't, I wouldn't worry about it. You won't be able to deduct an IRA, but that's ok because you won't be paying any taxes. You can have an IRA without filing taxes. Do write down the fact that you didn't deduct the IRA because in years to come that portion of your IRA will not be taxable.

Answer 3

For this you can just do it yourself.

Your family business should have you fill out a W4 form to be filed with the IRS and tells the book keeper of your family business what taxes to take out of your pay for federal and state taxes, and soc. sec. taxes.

Then early next year your family business should give you a W2 form. This form will state how much you have been paid and how much has been taken out for taxes.

Then you go to the post office and get a Tax Instruction booklet and a 1040 EZ form. It should be in the Tax booklet.

Fill out the form following the instruction.

If you can be claimed as a dependent on anyone else's form you can not take any of the standard deductions.

However you should be able to take the statndard Exemption. Last year it was $3300.00. Which would allow you to recieve a refund of all the federal tax that went to the government last year.

Answer 4

Do you get a W-2, and have social security and medicare deducted from your paychecks? You can file a 1040EZ if you do - it's pretty simple, you should be able to do it yourself without paying someone to do it. You won't owe any income tax. Check the box on the form that says you can be claimed by someone else.

Answer 5

give your information to your parents. They can still claim you. your part of any returns that you might get will come in one check but if you file single, you will get less back and your family cannot claim you and they will get less back too. Buy the way, unless they have changed the law you do not have to record under $8000. It is OK to start an IRA. But I would still let your parents claim you. It is the right thing to do for all. Why give more money to the government.

Answer 6

unless you have a w-2 form dont do it.