U12 L5A Taxes - Review (04/23/25)

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What is total income?

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Total income is the sum of all earnings from various sources, such as wages, salaries, and cash payments. For example, if Luisa earned $1,200 from her job and $500 from babysitting, her total income is $1,700.

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At what age can a teen file a tax return?

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A teen can file a tax return at any age if they earn income, but they must be at least 16 to file independently in many states.

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What is the purpose of filing a tax return?

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Filing a tax return allows individuals to report their income to the government, determine tax liability, and potentially receive refunds for overpaid taxes.

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What is income tax?

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Income tax is a tax imposed on individuals or entities based on their income or profits. It applies to wages, salaries, dividends, and interest earned.

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What does it mean to claim 'exempt' on a W-4 form?

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Claiming 'exempt' on a W-4 form means that no federal income tax will be withheld from your paycheck, usually because you had no tax liability in the previous year and expect none in the current year.

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Can a teen's earned income be reported on a parent's tax return?

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False. A teen's earned income must be reported on their own tax return, not on a parent's.

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What is the minimum income threshold for filing a tax return?

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The minimum income threshold for filing a tax return varies by year and filing status, but generally, if a teen earns above a certain amount, they are required to file.

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What is a refund in terms of taxes?

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A refund is the amount of money returned to a taxpayer when they have overpaid their taxes throughout the year.

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What is the difference between earned income and unearned income?

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Earned income is money received from work or services, while unearned income includes money received from investments, interest, or gifts.

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What is a W-4 form?

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A W-4 form is a document that employees fill out to inform their employer of how much federal income tax to withhold from their paycheck.