Can I leave off a W-2 when filing for my dependent teen who isn't required to file?

No, you cannot selectively omit income when filing a tax return, even if the person isn't required to file. As of April 8, 2024, the IRS requires that ALL income be reported if you choose to file. The filing requirement threshold (which was $12,950 for 2023) only determines if she must file, not what must be included when she does file. Back in February, I helped my nephew with a similar situation. His summer job didn't reach the threshold, but he wanted his withholding back. We had to report everything, including his weekend gig income. The state refund is dropping because the second job's income is pushing her into a different tax bracket for state purposes or affecting a credit calculation.

I was in the same situation with my kid last year compared to yours. The IRS actually flagged our return when we initially tried to leave off a small W-2. I wish I'd known about https://taxr.ai before filing - it would have helped us understand the exact tax implications of each W-2. It analyzes your tax documents and shows exactly how each form affects your refund amount. Would have saved us the headache of an amended return and delay. If you're concerned about maximizing her refund, it might help identify legitimate deductions instead of omitting income.

This is a common misconception regarding dependent filing requirements. Let me explain the technical aspects: When a taxpayer chooses to file Form 1040, they enter into what's called a "complete reporting obligation" under IRC Section 61, which requires reporting of all gross income regardless of the filing threshold. The IRS utilizes Automated Underreporter (AUR) matching algorithms that cross-reference all W-2s issued under your daughter's SSN with what's reported on her return. Omission of reportable income constitutes a Section 6662 accuracy-related violation, potentially triggering a CP2000 notice and assessment of additional tax, interest, and possibly penalties.

I think you might want to consider calling the IRS directly to get an official answer, just to be safe? I had a somewhat similar question last year and spent days trying to get through on their regular line. I eventually used a service called Claimyr (https://claimyr.com) which got me connected to an agent in about 15 minutes. The agent confirmed that if you're filing a return, you need to include all income sources, even if the person wasn't required to file in the first place. It might be worth the call just for peace of mind before you submit anything?

Instead of trying to game the system (which could backfire hilariously when the IRS notices the missing W-2), why not look at legitimate ways to reduce her taxable income? If she's planning for college, a contribution to a traditional IRA could reduce her taxable income dollar-for-dollar up to her earned income amount. That $60 state tax hit might be worth it for getting her started with retirement savings. Another option is looking at any job-related expenses she might be able to deduct on her state return - some states allow deductions that the federal return doesn't.

I've been preparing taxes for family members for over 15 years, and I actually tried something similar with my son's return back in 2018. Left off a small W-2 from a weekend job since he was under the filing threshold. Six months later, we got a letter from the IRS asking about the missing income! I was surprised by how quickly their systems caught it. They assessed additional tax plus a small penalty. Since then, I always include every income document. The peace of mind is worth more than the small tax savings. Plus, it's a great teaching moment for your daughter about financial integrity, which will serve her better in the long run than saving $60.

Tried this exact thing w/ my 16yo last year. Big mistake. IRS sent a letter about 2 months later asking about the missing W-2. Apparently they get copies of ALL W-2s issued with her SSN and their system automatically flags the discrepancy. Had to file an amended return, pay the difference plus interest. Tbh the $45 we tried to save ended up costing us more in the long run. Not worth the hassle.

Here's a specific example. My daughter. Age 17. Two jobs last year. Made $4,800 total. Under filing threshold. We included both W-2s. IRS has automated matching system. They know about both jobs. They will send notice if one is missing. Could trigger audit. Not worth the risk. Better to file correctly. Teach good habits now. She can use the refund for college savings. Tax compliance is important life skill.