Usually teenagers should file their own tax returns separate from their parents' return.
If a teenager has earned income for a job or self-employment, he should file his own return.
A teenager's earned income should not be added to his parents' tax return.
The parents will probably pay too much income tax if they add their teenager's earned income to their return.
The IRS may not catch the mistake.
A teenager can usually file the simpler Form 1040EZ, especially if his or her only income is from working as an employee.
Many parents worry that if a teenager files his own return, the will not be able to claim the child a dependent.
This is not usually the case.
In most cases, a teenager's parents can still claim the child on their tax return, provided that the teenager did not provide more than half of his or her own financial support.
A teenager filing his own return should not check the box on Line 6a, which allows a person to claim themselves for an exemption.
Teenagers do not claim themselves if they are claimed as a dependent on their parents' tax return.
The only time the IRS allows parents to include a child or teenager's income on their return is for unearned income belonging to a child.
Unearned income is income from investments such as interest on a savings account, dividends from stock or mutual funds and capital gains distributions from a mutual fund belonging to the child.
Parents, if your child or teenager has unearned income, do not simply add it to your income.
You must complete a Form 8814 Parents' Election to Report Child's Interest and Dividends.
The IRS warns that electing to include your child's investment income on your return could result in higher income tax.
For my tax clients, I always file a separate return for the teenager or child.
It keeps things clearer by separating the income between the parent and child.