HI I'm a student and work part time. My Mom claims me as a dependent. I earned $5998 on my W2 and they withheld $528 in 2015 and the standard deduction is $6300. How does that work if the standard deduction is higher than my income? I was told I didnt need to file back then, but now someone says that yes, I should, because I'll receive a refund. Thank you for your help. Jacob
If the standard deduction is higher than your income, then any federal income tax withheld would be refunded.
You have 3 years to claim a refund, so you'll need to file your 2015 return by April 15, 2019.
You can likely file using Form 1040EZ
Most states follow the federal deadlines, but you'll have to check for yours.
How does that work if the standard deduction is higher than my income?
Your withholdings are calculated by taking your periodic pay (e.g. weekly) and extrapolating it out to an entire year. If that amount is higher than the standard deduction (or possibly more depending on the number of exemptions on your W-4), then an estimate of the federal tax based on that pay period is withheld.
It's not uncommon for summer or seasonal jobs to withhold more than they should since the pay for that period can't be extrapolated to an entire year.
When you file your taxes, any tax withheld over what you owe (zero if you make less than the standard deduction) will be returned to you as a tax refund.
Yes, this happens all the time. You simply file your taxes and you get a refund. Really, you should be in the habit of filing taxes anyway.
Filing taxes starts by grabbing a 1040 (or 1040EZ if applicable) and doing a dry run. Gather and plug in all the numbers, and see what happens. Yes, indeed, there'll be a line where
- AGI is $5998
- Standard deduction is $6300
- AGI - Standard deduction is $0 (<0 not allowed)
- Exemptions are whatever
- Taxable income: Above - exemptions is $0 (<0 not allowed)
- Tax: Look up $0 in the tax table, big surprise, tax is $0
Then you get to the part after that, where it says
- Tax withheld: $528
- Other tax prepayments: $0
- Total tax payments $528
- If payments < tax owed, compute difference (<0 not allowed) and PAY: $0
- If payments > tax owed, compute difference (<0 not allowed): $528
- Amount you want to carryforward to your 2016 taxes: you write $0
- Amount you want refunded: $528
- Method for refunding: blah blah
That's really it. It's a lot of numbers and boxes but it's just that.
At the end of your dry run, when you realize you actually have something useful or mandatory to act on, then double check the numbers and transfer them onto another paper 1040 [EZ].
Then you sign it, scan it for your records, write in your SSN, and mail it in.
Several months later you get a letter from the IRS. It's a check. Grats.
It's way past too late to efile, and it's a better habit to file on paper anyway. Filing on paper actually is filing, unlike e-file which is legally more like "data exchange in lieu of filing".
Also, you don't want the habit of paper filing to be alien to you if you grow your wealth or businesses and start to get into the big complicated tax forms. Or file a 1040X to amend past year's taxes to claim even more refund, which is super fun by the way.