By Amy E. Feldman
PHILADELPHIA (CBS) – When is the right time to teach your kid the facts of life – by which I mean, Uncle Sam’s gonna take a bite out of that paycheck of yours, junior. The IRS has an answer.
In 2001, then 14-year-old Sean Belnick borrowed $500 and, with the advice of his stepfather, started a business selling office chairs on line. Now one of the largest on-line only office furniture stores, the young Mr. Belnick is worth $42 million. Oh! I wish I’d thought of that.
Other than making – or getting your kid to make – $42 million, one other thing you might not have thought of is this – if your kid makes any money, when and how does he have to file a tax return?
If your kid is listed as a dependent on your tax form, he has to file his own taxes if he’s under 65 and not blind if he earned income over $5,950 or if he received unearned income over $950, which is income that he didn’t earn but received from dividends, investments, or from collecting social security or disability and the like.
Of course, if your kid is worth $42 million, he can afford the taxes he’ll have to pay on all the money he made.