My son has captial gains must he file taxes

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Skip To Main Content. OVERVIEW It may be easier and less expensive to include dependents' income on your tax return rather than have them file their own return—in certain circumstances. Definition of dependent children The definition of a dependent for tax purposes includes both qualifying children and qualifying relatives.

Qualifying children must meet four criteria: They must be your child or stepchild, or a brother, sister, stepsibling or foster child. Descendants of these people also qualify, like your niece. If your child has a job that withholds federal income taxes , they may be able to get at least some of that money back by filing a tax return.

Your child may also benefit from filing a return if they qualify for a refundable tax credit, such as the Earned Income Tax Credit or the American Opportunity Tax Credit. These are the most common scenarios:. When you file a tax return, you get to choose between claiming the standard deduction or itemizing deductions , whichever method gives you a better tax benefit. Interestingly, no official age guidelines define who can sign and file a tax return. If your child can understand the instructions and fill out the return, then you can have them prepare and sign their own return.

It can be an excellent opportunity to teach your child about money management and the process of filing taxes. Just remember that your child is responsible for any penalties that might occur as a result of a return they fill out.

This legal liability could become a problem if the IRS finds issues with the return. The IRS can even refuse to divulge information or discuss any issues with you if your name is not signed or noted as a third-party designee on the form. Fortunately, if your child is too young to handle this kind of responsibility, a parent or guardian can complete and sign the form for them.

Would the IRS really audit a child?