Ask the ‘Stache: Can you really claim your working teen as a dependent?

NOTE: This is a self-employed and business-owner deduction. If you’re a W-2 employee going to a conference on your own dime, unreimbursed employee travel isn’t deductible right now — that’s been suspended since 2018.

Back to the question: You can only deduct the business portion of your travel — but the flight might dodge that rule entirely.

Transportation costs (airfare, train, mileage) are fully deductible as long as business is the primary reason for the trip, even if you bolt on personal days afterward. Everything else — hotel, meals, local transportation — only counts for the days you’re actually working.

Say your flight is $420 round-trip. Since the conference is still the reason you booked the ticket, that’s fully deductible. But of your five hotel nights, only three are yours to write off. Your spouse’s flight, hotel share, and meals aren’t deductible at all — they’re not conducting business, they’re on vacation next to someone who is. Your own business meals are deductible at 50%, and only for the business days.

The math changes fast if you flip the ratio. Add enough personal days and leisure becomes the actual reason for the trip — at that point the IRS can disallow the transportation cost too, not just the extra nights. There’s no bright-line day count in the tax code, but if personal days start outnumbering business days, you’re arguing against yourself.

👉 See what other travel costs you can deduct

 No, on both counts, in almost every case. Start with your side: for a “qualifying child” dependent — under 19, or under 24 if a full-time student — there’s no income test at all. The test that actually matters is whether you provided more than half her support for the year. If you’re still covering housing, food, and health insurance, her lifeguard paycheck doesn’t touch your ability to claim her.

The income cap people are thinking of does exist — it’s just for a different category. Claiming an adult relative (or a child who’s aged out of “qualifying child” status) under the “qualifying relative” rules comes with a real ceiling: their gross income has to stay under $5,300 for 2026. Mixing up which test applies is the actual mistake here, and it doesn’t apply to her.

Now her side. A dependent’s standard deduction on earned income is whichever is bigger: $1,350, or her earned income plus $450, capped at 2026’s $16,100 single standard deduction. If she earned $3,200 this summer, her deduction is $3,650 — more than she made, so she owes $0 in federal income tax.

Her employer’s payroll system doesn’t know that, though. It withholds using standard tables that generally assume year-round income, so most part-time summer workers get over-withheld. The only way to get that money back is to file — even though nothing requires her to. One exception: Social Security and Medicare withholding (7.65%) isn’t affected by any of this and isn’t refundable through a return, no matter how little she earned.

File her return for the refund. Keep claiming her on yours. The two aren’t in conflict.

👉 Find out if your teen should file a return

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If you own a business (or you’re building one), this one’s for you.

Not necessarily — there’s a shortcut that can get you the full amount.

The standard rule prorates your HSA limit by the number of months you had high-deductible health plan (HDHP) coverage. But the “last-month rule” lets you contribute the full annual limit if you’re enrolled in an HDHP on December 1, regardless of when your coverage started.

For 2026, the self-only HSA limit is $4,400. Under strict proration, six months of coverage (July through December) would cap you at $2,200. Under the last-month rule, since you’re covered as of December 1, you can contribute the full $4,400 — even though you only had the plan for half the year.

The catch is the “testing period.” To keep the extra amount, you have to stay HSA-eligible through December 31 of the following year. If you drop the HDHP, switch to a different health plan, or enroll in Medicare before then, the amount you contributed beyond the prorated limit gets added back to your income and hit with a 10% penalty on top.

If you’re confident this coverage is staying put through next year, use the last-month rule and max out now. If there’s any real chance you’re changing plans or jobs in the next 12 months, take the prorated amount instead and skip the clawback risk entirely.

👉 Check your prorated HSA contribution limit

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