Dependents Who Must File Their Own Return

Anthony brought his nephew Malik in during the third week of tax season.

Malik was 17. He’d worked a summer job at a grocery store — made about $7,400, had withholding. He also mowed lawns for neighbors and brought in another $800 or so in cash.

Anthony was there to claim Malik as a dependent on his own return. He was Malik’s legal guardian. Malik lived with him full time.

“Does Malik need to file his own return?” Anthony asked. “Or does the income just go on mine since he’s my dependent?”

The preparer looked at the numbers for a moment.

“Two separate things,” she said. “You claim Malik on your return as a dependent. And Malik also files his own return. Both happen. And actually, Malik needs to file anyway — he had self-employment income above the $400 threshold.”

Anthony blinked. “He’s 17.”

“Age doesn’t matter for the self-employment threshold. If he net more than $400 mowing lawns, he files.”

This is one of the most overlooked situations in the tax office. Parents and guardians come in to claim their children and assume the child’s income just disappears into the picture. It doesn’t. Dependents have their own separate filing requirements, and the preparer who catches this is doing their client a genuine service.

A dependent who is someone else’s qualifying child or qualifying relative has their own separate set of filing thresholds. These are different from the thresholds for non-dependent filers:

Malik’s situation: $7,400 in earned wages (below $15,000) PLUS $800 in self-employment income. The $800 self-employment net is above $400. Malik must file regardless of his wage income being below the threshold. The SE threshold applies independently.

The Kiddie Tax is a provision that prevents parents from shifting investment income to their children to take advantage of the child’s lower tax rate. Under the Kiddie Tax rules, unearned income above a threshold for children under 19 (or full-time students under 24) is taxed at the parent’s marginal rate, not the child’s rate.

For 2025, the threshold is $2,500. Unearned income above that amount on a dependent’s return is taxed at the parent’s rate. This is calculated on Form 8615, which attaches to the child’s return.

The Kiddie Tax rarely affects standard working teenagers — Malik’s situation has no unearned income, so it’s not relevant. But if a client comes in with a college-age child who has significant investment income — dividends, capital gains, trust distributions — the Kiddie Tax may apply. Know enough to recognize when it’s in play.

A dependent who files their own return cannot take the full standard deduction. Instead, their standard deduction is the greater of $1,300 or their earned income plus $450 — capped at the regular standard deduction amount ($15,000 for single filers in 2025).

In practice: Malik earned $7,400 in wages. His standard deduction as a dependent is $7,400 + $450 = $7,850. That’s his standard deduction — less than the $15,000 a non-dependent single filer would get. His taxable income from wages is $7,400 minus $7,850 = $0. But his $800 self-employment income creates a Schedule C and Schedule SE situation, and the SE tax is calculated on that $800 regardless.