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Another perspective - I'm a college student now, but I worked all through high school while being claimed as a dependent. My income never affected my parents' tax refund. The only thing that happened is I had to file my own tax return each year. The benefit was actually huge for me: I learned about taxes early, built up work experience, and even qualified for some tax credits when I started college because I had a work history. Plus now I have a good credit score because I started building credit early. Don't let tax confusion stop you from getting valuable work experience as a teen! Your future self will thank you.
That's really encouraging to hear! Did you have to do anything special on your tax return to make sure your parents could still claim you as a dependent? I'm worried about filling something out wrong and messing up my parents' taxes.
Nothing complicated at all! On your tax return (if you need to file one), there's just a checkbox that says "Someone can claim you as a dependent." You check that box, and that's it! You file your return, your parents file theirs claiming you as a dependent, and everything works out fine. The first year I filed, my dad helped me through it using TurboTax, and it was actually way easier than I expected. After that, I did it myself. When you're a dependent with a simple job, tax filing is usually very straightforward - just a few forms to fill out.
One important thing no one's mentioned - some of your income might be completely tax-free if you're 16! If you're doing babysitting, lawn mowing, pet sitting, or other household-type work directly for people (not through a company), that's considered "household employee" work. If you earn less than $2,600 from any ONE household in 2025, that employer doesn't have to withhold Social Security or Medicare taxes, and you don't have to report that income if your total earnings are below the filing threshold! So you could potentially earn quite a bit without ANY tax consequences at all, depending on the type of work.
This isn't completely accurate. You're confusing household employee rules with self-employment. If someone is babysitting or doing lawn work as an independent contractor (which most teen jobs like this are), they need to file if self-employment income exceeds $400, even if they're a dependent.
Just want to share my experience - I tried deducting my patio renovation as a business expense because I host client meetings there. Got audited. It was not fun. The IRS agent basically said home improvements that add value to your property are almost never deductible as business expenses, even if you sometimes use them for business. What DID work for me was claiming a portion of my utilities and internet as business expenses based on the percentage of my home used exclusively for business. That's the key word - "exclusively.
Did you try writing off the furniture for the patio instead of the construction? Like outdoor tables or chairs used for client meetings? Wondering if that would be treated differently.
Yes, I was able to deduct the outdoor furniture since it was clearly business-related and doesn't add permanent value to the home. The IRS treats movable business assets differently than permanent improvements. The agent actually suggested keeping a log of client meetings to demonstrate business use of those assets. Furniture is typically depreciated over 7 years for business use, but depending on cost you might be able to use Section 179 to deduct it all in one year. Definitely different than trying to deduct the actual construction of the deck or patio.
Has anyone successfully used the home office deduction? I'm trying to figure out if it's worth claiming or if it's an audit red flag. I've heard both.
Something critical that hasn't been mentioned yet is the concept of "tax residency" vs just physical presence or visa status. The US-Canada tax treaty has specific provisions that might apply to your situation as a Canadian citizen. Even if you meet the substantial presence test, you might be able to claim closer connection to Canada under the treaty's "tie-breaker rules" if you maintain significant ties there. However, claiming treaty benefits requires filing Form 8833, which actually puts you on the IRS radar rather than hiding from it. And if you're trading US securities while physically present in the US, that income may still be considered US-sourced regardless of treaty provisions. The offshore entity adds another layer of complexity because of anti-avoidance rules like CFC (Controlled Foreign Corporation) regulations. If you control the entity, the IRS may look through it and tax you directly.
Can you clarify how the tie-breaker rules work? I'm a Canadian citizen on TN status but have been in the US for 4 years. I was told I can't claim treaty benefits anymore because I'm clearly a US resident for tax purposes now.
Tie-breaker rules look at factors like where you have a permanent home, center of vital interests (closer personal/economic ties), habitual abode, and nationality. After 4 years in the US on a TN, it's difficult (but not impossible) to claim closer connection to Canada. You would need to demonstrate stronger ties to Canada than the US - permanent home there, family, bank accounts, voting, etc. The longer you stay in the US, the harder this becomes. Most tax professionals advise that after 3-4 years, you're likely a US tax resident unless you've deliberately maintained stronger Canadian connections. Filing Form 8833 to claim treaty benefits doesn't guarantee approval - it just asserts your position.
Everyone's missing a crucial point here. The INTENTION behind your structure matters legally. If the IRS determines the primary purpose of your offshore structure is tax avoidance rather than legitimate business purposes, you could face serious consequences beyond just taxes. I'm not an expert, but I've seen cases where people were hit with civil penalties and even criminal charges under various anti-money laundering and tax evasion statutes. The IRS and FinCEN don't look kindly on structures designed primarily to hide income. If you're trading US markets while physically present in the US, using an offshore entity primarily for tax benefits is exactly the kind of arrangement that gets flagged. The "economic substance doctrine" means the IRS can disregard arrangements that don't have legitimate business purpose beyond tax savings.
This is a really important point. My friend went down this road with a Cayman Islands setup for his trading business. Ended up with a full IRS audit, massive penalties, and had to pay all back taxes plus interest. The IRS agent specifically cited the lack of economic substance to the arrangement as the primary issue. Not worth the risk.
Have you looked into whether your employer offers a Section 125 Cafeteria Plan? Some employers allow domestic partners to be covered pre-tax through these plans, which could eliminate the imputed income issue. My company started offering this last year and it saved me from the exact problem you're describing.
I haven't heard about this option. I'll definitely ask HR about it tomorrow. Do you know if there are specific requirements for a domestic partner to qualify under a Section 125 plan? Or does it vary by employer?
It does vary by employer, but generally they require proof of financial interdependence like joint bank accounts, shared lease/mortgage, or being named as beneficiaries on insurance policies. Some employers also require an affidavit that you've been in a committed relationship for a certain period (often 6-12 months). The key thing is that Section 125 plans allow employers more flexibility in defining eligible participants than standard health plans. Not all employers offer this option though, as it requires specific plan administration. Definitely worth asking about!
lol just get married already, problem solved π€·ββοΈ srsly tho why deal with all this tax headache for "personal reasons" when marriage would instantly fix it and probably save you thousands?
That's a pretty insensitive comment. There are many valid reasons people choose not to get married that have nothing to do with their commitment level. Financial considerations are just one factor in that decision.
Esmeralda GΓ³mez
One thing to remember is that you'll need to pay quarterly estimated taxes next year if you continue doing deliveries. Since there's no withholding on cash payments, you're responsible for making those payments yourself if you expect to owe $1,000 or more in taxes. The IRS can charge penalties if you wait until filing season.
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Klaus Schmidt
β’How do you figure out how much you owe for the quarterly payments? I just started doing deliveries this year and am totally lost.
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Esmeralda GΓ³mez
β’You need to estimate your annual income from deliveries, calculate the taxes you'll owe, and divide by four for each quarterly payment. The simplest approach is to set aside about 30% of your delivery earnings (15.3% for self-employment tax plus your income tax rate). You can use Form 1040-ES to calculate the exact amount, or many tax software programs have quarterly tax calculators. The quarterly due dates are April 15, June 15, September 15, and January 15 of the following year.
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Aisha Patel
Just want to clarify something - I did UberEats and Instacart last year and I got 1099s from them. But it sounds like the original poster was just doing cash delivery work directly for people in the neighborhood? The reporting would be the same (Schedule C) but obviously there's no 1099 form in your case.
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Giovanni Rossi
β’That's right - this was all word of mouth with seniors in my community. No app involved, just me picking up groceries and prescriptions for cash payment. No 1099s or any official paperwork.
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