Not a lot changed in the US tax code for teenagers for 2013, except a few thresholds:
Income tax is paid on earned income greater than $6,100 in 2013 (up from $5,950 on 2012)
Income tax is due on unearned income (usually investment income like interest and dividends) over $1,000 in 2013 (up from $950 in 2012).
The tax for teenagers with both EARNED and UNEARNED income are more complex. The guidelines involve comparing a teen’s gross income (meaning their total income from all sources) to the greater of
- $1,000 or
- earned income plus $350 (up from $300 in 2012).
If you purchased the Kindle version of my ebook, Teens and Taxes, be aware that it is based on 2012 thresholds. Just keep in mind these 2013 thresholds when preparing a teenager’s tax return.
Carol Topp, CPA