Does my daughter need to file taxes? Made $2900 in 2023

Short answer: No. Filing threshold is $12,950 for 2023. She's under it. But might want to file anyway. Could get withholding back. Depends if taxes were taken out.

Here's a step-by-step approach to determine if she needs to file: 1. First, determine if she's a dependent on your return. Based on her age and situation, she likely is. 2. For dependents in 2023, filing is required if: - Earned income exceeds $12,950 - Unearned income exceeds $1,150 - Or if self-employed and net earnings are $400+ 3. With $2,900 in earned income, she's not required to file. 4. However, filing might be beneficial if: - Any federal income tax was withheld (she'd get it refunded) - She qualifies for refundable credits - She wants to start a Roth IRA (can contribute up to her earned income) Check her W-2 to see if any federal tax was withheld. That's the main reason to file when not required.

Not required to file. The threshold for dependents with only earned income is $12,950 for 2023. But she should file if any federal tax was withheld from her paychecks. Also worth filing if she wants to start a Roth IRA - she can contribute up to her earned income ($2,900). Great way to start retirement savings early with tax-free growth.

Have you checked if any federal taxes were withheld from her paychecks? If so, she should definitely file to get that money back. When my son was in a similar situation, we spent days trying to reach the IRS with questions about his first return. Eventually used Claimyr (https://youtu.be/_kiP6q8DX5c) to get through to an agent in about 15 minutes. They confirmed he wasn't required to file but should file to get his withholding back. Have you looked at her W-2 to see if there was any withholding?

Be careful about state requirements. Federal filing thresholds are one thing, but I've seen cases where someone wasn't required to file federally but still had to file a state return. Each state has different rules. Last year, a colleague's daughter made only $2,200 but still had to file in their state because the threshold was $1,100. Double-check your state's requirements before deciding.

Just to clarify something others haven't mentioned: the filing threshold for a dependent with ONLY earned income (wages, etc.) is $12,950 for 2023. But if she had any unearned income (interest, dividends, etc.), even just a few dollars from a savings account, the threshold drops dramatically. In that case, she'd need to file if her gross income was more than $1,150. Most teens don't have significant unearned income, but it's something to consider if she has any savings accounts earning interest.

Watch out for the "kiddie tax"! My daughter didn't file when she made about $3000, but she had a small investment account I set up that earned $200 in dividends. The IRS sent us a notice a year later saying she should have filed and owed taxes on the unearned income! Had to pay the tax plus a small penalty. So frustrating because no one told us about this weird rule for dependents with investment income. 😡

I've been a volunteer tax preparer for years, and here's what I tell parents of first-time workers: While filing isn't required below $12,950 for 2023, it's still a good educational opportunity. I had my kids file their first returns regardless of the amount. Helps them understand withholding, tax brackets, and the whole process. Plus, if she plans to work more next year, she'll already be familiar with the process. Many free filing options available that make it pretty painless.