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When I first moved to Sumner as a kid, I was asked to be in a rock group. I said I preferred country music. It turns out the rocks are here EVERY year and you get paid to pick them up, which was a change from my earlier experience in the hills of Clayton County. Tis the season of rock picking, hay making and detasseling is not far behind. While this work isn’t as readily available as it once was, it still plays an important part of our local economy.

Whether a child who is a dependent has to file his or her own return generally depends on two easily determined factors: whether the money is earned or passive and the amount of income. That is, for most kids, did you put it in the bank and watch it grow or did you get your hands dirty or give up your time to get the money.

The rule for children and other dependents is that if the only income is earned and it is less than $5,700, there’s no need to file a federal income tax return.

Even if your child doesn’t have to file a federal income tax return, he or she may want to file a return if federal income tax was withheld from income. This doesn’t usually happen for farm jobs or babysitting, but it might if they fill out the W4 wrong at the fast food restaurant. Your child might also want to file if he or she qualifies for certain credits which would result in a refund.

The rules are different for unearned income like dividends and interest. It is referred to as the “Kiddie Tax”.  For children under the age of 18, or under the age of 23 while a full time student, the first $950 is considered tax-free and the next $950 is taxed at your child’s rate. Unearned income over $1,900 is taxed at the child’s parents’ tax rate  

When they earn both kinds of income, it gets a little more tricky. If gross income was more than the larger of $950 or the amount of earned income (up to $5,400) plus $300 then your child must file a return.

For those of you who need the neighbor kids to get the work done, consider the following information from the Federal government.

By regulation, employers must keep records of the dates of birth of employees under age 19, their daily starting and quitting times, their daily and weekly hours of work, and their occupations.

The following is a listing of the basic payroll records that an employer must maintain:

  • Employee's full name, as used for Social Security purposes, and on the same record, the employee's identifying symbol or number if such is used in place of name on any time, work, or payroll records
  • Address, including zip code
  • Birth date, if younger than 19
  • Sex and occupation
  • Time and day of week when employee's workweek begins
  • Hours worked each day and total hours worked each workweek
  • Basis on which employee's wages are paid (e.g., "$9 per hour", "$440 a week", "piecework")
  • Regular hourly pay rate
  • Total daily or weekly straight-time earnings
  • Total overtime earnings for the workweek
  • All additions to or deductions from the employee's wages
  • Total wages paid each pay period
  • Date of payment and the pay period covered by the payment

 

Thursday, October 21, 2021
  • Patrick B. Dillon
  • Jill Dillon
Dillon Law PC
Patrick B. Dillon enjoys finding solutions to legal issues and catching problems for clients. Pat practices in the Sumner office regularly represents clients in district, associate district and magistrate courts for agricultural, real estate, criminal and collection issues. He drafts wills and trusts, creates estate plans and helps clients through the probate process.
Dillon Law PC
Jill is a University of Northern Iowa undergraduate (Political Science Cum Laude) and a Drake University Law School graduate. Jill is the assistant Fayette County Prosecutor and a certified family law mediator. Jill still has ties to her family farm operation which includes a dairy herd. Jill Dillon focuses on bankruptcy, adoptions, and mediations.

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