Do Students Need to File Taxes if They Only Have a Trading Account?

If you’re a college student, you might think that filing taxes is only for people who have jobs. Having a trading account is another reason you might need to file taxes.

This post is provided for general information only. Please confirm the details and circumstances of your unique situation with your tax accountant or other appropriate advisor before taking action.

When does a college student need to file taxes?

A college student needs to file taxes if any of the following situations apply.

  • Your total taxable income (from jobs, trading accounts, bank interest, and more) is more than the standard deduction.
Filing Status202220212020
Single and Married Filing Separately$12,950$12,550$12,400
Married Filing Jointly and Qualifying Widower*$25,900$25,100$24,800
Head of Household$19,400$18,800$18,650
Single Age 65+$14,700$14,250
Married Filing Separately One Spouse 65+$14,350$13,900
Married Filing Separately Both Spouses 65+$15,750$15,250
Married Filing Jointly and Qualifying Widower Age 65+$27,300$26,450
Married Filing Jointly Both Spouses 65+$28,700$27,800
Head of Household Age 65+$20,800$20,500
Dependent with Unearned Income Only$1,150$1,100
Dependent with Earned and Unearned Income Totalling Less Than the Usual Standard Deduction AmountEarned income plus $400Earned income plus $350
*A surviving spouse with a dependent child can generally file for qualifying widower status for two years after the death of their spouse.
  • You have self-employment income of at least $400
  • You can be claimed as a dependent and have unearned income of $1,100 or more
  • You want to claim the Earned Income Credit, Child Tax Credits, American Opportunity Credit, or other credits

Unearned income is income you don’t receive from a job. Unearned income includes income from your trading account.

What counts as income from a trading account?

There are several types of income you can receive from a trading account.

  • Capital gains — selling a stock, fund, or other investment for more than you paid for it
  • Dividends and interest — payments you receive from holding a security
  • Capital gains distributions — payments you receive from a fund if it had capital gains on sales inside of the fund

Getting your original money back, such as a maturing CD or what you original paid for a share you sold, is not income.

Will I owe taxes?

If you have to file a tax return, there’s a good chance you’ll owe taxes. The IRS sets the filing requirements so those who won’t owe anything don’t have to file and those who will owe do have to file.

You may be eligible for deductions and credits that reduce what you owe. If you’re eligible for refundable tax credits, you could even get money back. Some special types of investment accounts also don’t count towards your taxable income when you use the money to pay for education expenses.

Be sure to review the requirements for estimated tax payments. If you owe more than $1,000 when you file, you may owe a penalty for not paying taxes throughout the year.

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