Does My Daughter Need to File This Year?

What is the name of your state? Florida
My 18 year old daughter resides at home with us. She is a full time student at the local college, starting her first semester there in the Fall, 2006.
She works part time in a local restaurant. She just received her W-2. Her gross pay for the year was just under $1,500.
Will she need to file taxes on this? Thank you.

As a student, she should file. Doing so facilitates financial aid (fafsa).

In addition, if any taxes were withheld she would get them back. This does not stop you from claiming her as a dependent, she would file as "dependent of another".

If she made less than $8,450 gross income, she does not need to file taxes. Chances are she will have had taxes taken out and would be getting a check and not a bill. Also, you need to file taxes in order to get financial aid from FAFSA. And the obligatory "I'm not an internet troll" link to a creditable source:

http://www.irs.gov/publications/p501/ar01.html

GatorLaw said:

If she made less than $8,450 gross income, she does not need to file taxes. Chances are she will have had taxes taken out and would be getting a check and not a bill. Also, you need to file taxes in order to get financial aid from FAFSA. And the obligatory "I'm not an internet troll" link to a creditable source:

http://www.irs.gov/publications/p501/ar01.html

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Yes, she did have around $78 in federal taxes taken from her wages. So if I understand correctly, she isn't required to file a return, but doing so has is actually advantageous: a refund, and financial aid from FAFSA.
Thank you!

I don't disagree with the general conclusion. However,

And the obligatory "I'm not an internet troll" link to a creditable source:

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read further young reptile and learn all is not as it seems at:
http://www.irs.gov/pub/irs-pdf/p929.pdf

You see,

My 18 year old daughter resides at home with us. She is a full time student at the local college

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comibined with:

Her gross pay for the year was just under $1,500

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makes me think she is a dependent who will be claimed on her parent's taxes.

That does not change the fact she should file, it just changes the required to file numbers.

Tranquility, she is certainly going to be claimed as a dependent on our tax return. You say this "changes the required to file numbers". Could you clarify what you meant by this, please?

tranquility said:

I don't disagree with the general conclusion. However,

read further young reptile and learn all is not as it seems at:
http://www.irs.gov/pub/irs-pdf/p929.pdf

You see,

comibined with:

makes me think she is a dependent who will be claimed on her parent's taxes.

That does not change the fact she should file, it just changes the required to file numbers.

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You are correct. I briefly skimmed his post and missed the claiming the child. Having the student as a dependent changes the number to $5,150 in wages or if the student earned over $850 in bank interest, capital gains, or dividends.

SallyX said:

Tranquility, she is certainly going to be claimed as a dependent on our tax return. You say this "changes the required to file numbers". Could you clarify what you meant by this, please?

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Nothing that changes anything for your daughter or you. It just means that since she is your dependent she would be required to file with less income than if she wasn't your dependent, as was noted above.

doesn't the daughter also meet the requirements where her income could be included on her parents tax return?

fairisfair said:

doesn't the daughter also meet the requirements where her income could be included on her parents tax return?

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The last time my mommy did my taxes was 1991.

Just for fun , I plugged my 2006 numbers into the 1991 1040 and tax rate, and my tax liability for 1991 would have been 2.5 times what they are for 2006!

Were we not getting hosed back then? Or do we just have it too good now?

I don't think so. Although the age was changed this year to 18 (from 14), the election has to do with interest and dividend income of over $850. (And, less than $8,500.) Also, the child must be *required* to file. There are other rules as well that make it so that the parents could not report the income on their return. (Withholding, earned income)

tranquility said:

I don't think so. Although the age was changed this year to 18 (from 14), the election has to do with interest and dividend income of over $850. (And, less than $8,500.) Also, the child must be *required* to file. There are other rules as well that make it so that the parents could not report the income on their return. (Withholding, earned income)

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Active income (ie earned income) can never be claimed on a parent's return. Only passive income (interest, dividends and other passive income) can be claimed on a parent's return.

I agree. I don't think the income can be claimed if there is withholding or earned income.

(I think the term is non-passive, not active.)

tranquility said:

I agree. I don't think the income can be claimed if there is withholding or earned income.

(I think the term is non-passive, not active.)

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That's a little "quirk" of mine in terminology...LOL. My mind thinks "active participation", active income.