I just did some quick research so you could be correct that she’d have to file her own.
Hopefully, she can just claim exempt and she wont need to file next year.
The best reason to encourage your kid to file their taxes, is that it teaches them that you DON’T need to be a CPA, CFA or have an MBA focused on Tax to do your own taxes.
I am astonished by the number of people with “normal” situations (one wage earner, one job, a modest savings account) who need to pay a professional to file their taxes.
Get your kid in the habit of filing their taxes, even if it’s just to enjoy the $125 tax refund. It builds over time. By the time they have investment income, more complex tax situations, income earned in two domiciles, etc. they’ll be pro’s themselves, whether using TurboTax or just filling out the forms themselves.
I am cynical on the paid tax preparer industry-- mainly because I know a lot of people who moonlight as paid tax preparers for both the big chains and small CPA firms.
Trust me when I tell you that they know LESS about the tax code than most college educated folks who can read at a 9th grade level. The jobs pay better than stocking shelves at CVS and therefore, are a nice “middle class sounding” source of extra income. But they are using the same software package that YOU can buy at Staples.
Rant over. One friend of mine has spent the last two months complaining about “the tax season rush” and the rest of us have to zip our lips to keep from laughing. She can’t calculate a 20% tip off a $20 tab at a restaurant and she’s getting paid to do tax returns?
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Although I appreciate your perspective on life lessons, I dont want my D to be filing taxes next year if we can avoid it by claiming exempt on her W-4.
She’s got a million things on her plate next spring (teaching assistant for her history professor, writer for school newspaper, peer advising counselor, school senate, officer in multiple businesss clubs, attending networking coffee chats, looking for next year’s internship, other social clubs/events etc) in addition to her class work and social life.
Just installing Turbo Tax gives me a migraine.
I agree. I have been filing taxes since i had my first job at 15. My 17 year old filed twice now (summer job earnings). Super easy using tax slayer. He only needed a little help with things like his social security number. Helpful moment for us to be able to say, this is a good number to know. I am not sure if he needed to file or not, but for me it was easier to get him in the habit of filing yearly than to look up every year whether or not he is exempt. He liked getting the little refund. We use turbo tax for our own.
Edited to add that my mom was the one who taught me to do my own taxes. She completed up to only about 9th grade in school. She did her own and helped some of her friends for years before turbotax was so popular. Granted, none of them had complicated tax situations but she took pride in it and no one in her group was going to br able to hire someone.
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Wouldn’t filing 2025 taxes depend on 2025 income?
Yes. D will earn about $9-$10k? for her internship this summer which (unless she can claim exempt) will have to file in 2026.
No point in going through all that if we can avoid it. It’s unncessary.
If she wants to learn about taxes, I can discuss the effects of the AMT exemption phase-out pre/post TCJA - not inputting some data into TurboTax for $100 refund.
Correct, if your daughter will be claimed as your dependent and her only income is earned income of $15k or less (no interest, dividend or investment income), her earnings will be fully covered by the 2025 single standard deduction. As long as there is no withholding for federal income tax because of the Exempt claim on a W-4, there should be no reason to file a federal return. Depending on the state(s) in which she is earning income, don’t forget about state withholding and filing.
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Thank you!
As I think there is a decent chance we’re heading for a recession - one reason to file taxes is for blanket stimulus checks. My daughter filed in 2020 to get less than $100 back from modest high school earnings - my son chose not to (I do think his withholdings were like $30. When those juicy checks went out during Covid, he very much regretted that decision.
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On the housing stipend/summer internships -
My son had a summer 2024 CivE internship in Schenectady/Albany - the company put him in corporate housing for the summer and gave him a small amount for the travel to get there. This summer he has a MechE internship north of Pittsburgh and the company is giving him a $6k stipend for summer housing to spend on whatever and keep the change. He’s opting for less expensive housing and longer commute to pocket as much $$ as he can.
Re: taxes - the biggest challenge we had with helping son file taxes this year is that he earned income in three states - he had no withholdings in the state where he goes to school, which was fine as his income was low, he had tiny investment income in our home state, but the state where he worked last summer (NY) because he did so much overtime he did have over the $15k and had to file. Which just meant more states and forms than he (or I) was used to. But a good learning experience.
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Regarding stimulus checks, I wanted one of my kids to file taxes on the $300 he earned it as a tour guide for exactly that reason! He may regret that decision!
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Job market is getting more difficult for college grads.
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Yep new grads face a lot more risks than they ever did. Every marginal thing will matter now to a degree it didn’t before - rigor of education, college reputation, prior internships, personal initiative, networking and referrals, visa status, relevance of major etc.
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I think you’re right. Obviously this is just one example, so we can’t draw any big conclusions, but my son was on a committee for a STEM hire recently. They got hundreds of applications and ended up giving full interviews to three people. Two of them were really strong candidates, and in past years they probably would’ve hired both. But this year, they could only afford to hire one. So they started looking for ways to tell them apart—and ended up going with the one who didn’t coast through second semester of senior year. The committee needed something and they reasoned the tougher spring semester showed a better work ethic and genuine interest in the subject. The winning candidate had the option to coast, but he didn’t.
A big difference this year is there are less jobs for the declined applicant to pivot to. Sometimes it’s the little things that make a difference and it’s hard to know what little thing it will be.
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Rigor was never marginal. For many employers, it is the one constant…
The endless discussions on CC about which college is more prestigious than the other- they all ignore rigor. Which an ambitious kid can create, and a lazy kid can avoid.
My least favorite interviews are with kids who claim to be “passionate” about “international business” or global affairs. They are fluent in one language- English. They get their news from one source- Instagram or Reddit. They have never picked up a copy or logged on to the FT, Economist, or other well researched/fact checked global publications. They could not tell you why the Euro was created, why the aging population in Japan is a concern to central banks around the world, how to find Brazil or India on a map. But they are “passionate” about global business.
Kids- rigor counts. And when the job market tightens, it counts more than ever.
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Just a follow up about Cornell Tech, many events and start up awards, open to the public announced this month:
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It’s going to be interesting to see how high demands from grads meet a tough job market.
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I know one can not compare the US and Canadian job markets, but this timely article was in our paper today
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Wow - get ready for a rude awakening new graduates.
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Tough job market = increased applications to graduate schools.
My nephew applied to law school and the competition is fierce. I thought he’d be a shoo-in for T14 but it’s tough.
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