Andrew Schwartz CPA recently published a 5-minute video to help children and students complete their W-4 forms correctly. This recorded presentation is available at: https://youtu.be/7ywlxeq-9nE.
"One thing I continually notice is that most of my clients' kids who work are incorrectly having federal and state income taxes withheld from their wages. Please note that a working child will generally owe no income taxes unless wages earned exceed $6,300 (in 2015) and/or investment income exceeds $350," explains Andrew Schwartz CPA, founder of The MDTAXES Network, an affiliation of CPAs who specialize in healthcare professionals and their practices.
"Needless to say, most of the kids are getting back all the federal and state income taxes withheld during the year. By claiming 'exempt', these kids avoid having federal income taxes withheld, which gives them more of their paycheck sooner, and also avoids the costs and headaches of filing a federal income tax return next winter to get back those taxes that were unnecessarily withheld," says Schwartz.
This 5-minute video also explains the Social Security and Medicare taxes that are withheld from the wages of most US workers, and details what to do if a child will earn more than $6,300 this year and will ultimately owe income taxes on their wages.
"With a child's first or second job and filling out a W-4 form for that job, most kids are completing a tax form for the very first time. Please share this video with your child to help introduce him or her to the U.S. tax system at the same time your child is being asked to deal with federal income taxes at a very elementary level," says Schwartz.
About The MDTAXES Network:
The MDTAXES website (http://www.mdtaxes.com) has been up and running since 1995 and contains a thorough analysis of the tax issues relevant to healthcare professionals. The site includes a monthly newsletter, a message board monitored by the CPA members, and a variety of basic financial planning tools including a Financial APGAR test. Visitors to the site can sign up to receive their informative monthly newsletter via e-mail.
Unlike other directories of CPAs, MDTAXES grants their CPA members exclusivity by metropolitan area. This allows the members to focus on developing a healthcare niche within their CPA practices, and to keep current with all the tax breaks and pitfalls common to these professionals.
The MDTAXES Network is maintained by CPA Niche, LLC (http://www.cpaniche.com), which also maintainshttp://www.FindAGoodCPA.com, a site where taxpayers can locate and interact with CPAs and EAs who specialize in a wide variety of niches.
"In today's fast paced business environment, specializing allows CPAs to give their clients the timely information needed to help minimize their tax burden and make prudent business decisions," explains Schwartz.
One thing I continually notice is that most kids who work are incorrectly having federal and state income taxes withheld from their wages. Please note that a working child will generally owe no federal income taxes unless wages earned exceed $6,300 (in 2015) and/or investment income exceeds $350. Needless to say, most of the kids are getting back all the federal and state income taxes withheld during the year. By claiming "exempt", these kids avoid having federal income taxes withheld, which gives them more of their paycheck sooner, and also avoids the costs and headaches of filing a federal income tax return to get back those taxes that were unnecessarily withheld.
