Entering the workforce and earning your first paycheck is an exciting milestone! But it also means it’s time to start thinking about taxes. You might wonder if you need to file taxes. The short answer is that it depends on how much you earn and other factors but getting familiar with the basics of taxes is helpful. Here’s some important tax filing information to get you started!
When do teens start paying taxes?
It doesn’t really matter how old you are. In general, if you’ve got a job where you earn an hourly wage, your employer will automatically withhold tax from your paycheck. In fact, you may have noticed deductions on your paystub for Social Security and Medicare (FICA), federal income tax, and possibly state income tax, too. If you’re paying these taxes, then you may also need to file a tax return.
Whether or not you are required to file a federal income tax return depends on how much you’ve earned that year, regardless of your age. In general, the IRS expects you to file a tax return if you earn more than the standard deduction amount. For 2024 tax returns (filed in 2025) the standard deduction is $14,600 for single filers under age 65.
But even if you earn less than the standard deduction amount, you might still decide to file a tax return. That’s because filing a tax return is the only way to claim a tax refund if you’re owed one.
If you do file, your parent(s) or guardian(s) should not report your earned income on their taxes. However, the IRS requires you to indicate that someone else can claim you as a dependent on your return.
If you’re still not sure where you need to file an income tax return, the IRS has a “Do I need to file a tax return?” tool that you can use for free anytime.
Do teens have to pay taxes for a side job like babysitting, lawn mowing, etc.?
Possibly. If you earn more than $400 by mowing lawns, babysitting, or other activities, the IRS considers you self-employed. You’ll need to file a tax return and report what you earned from these types of jobs if you earn more than $400 per year.
The good news is you can also take tax deductions for certain expenses that are related to your job. For example, you can deduct mileage if you drive yourself to and from work on a regular basis. Also, if you use your own lawnmower to mow grass, you can write off the cost of your equipment.
Do I have to file taxes if my parents claim me as a dependent?
Even if your parents claim you on their taxes, you might still have to file your own return. It all depends on how much you earned during the year. If you made more than the standard deduction amount for dependents, you need to file. If your parents are claiming you on their tax return, you’ll need to check a box that lets the IRS know you are “claimed as a dependent on another return”.
There are instances when you would not file as a dependent. For example, if your parents do not provide at least half of your financial support, you would not qualify as their dependent. Additionally, if you are married and choose to file your taxes jointly with your spouse, you would not be considered a dependent.
Do minors get taxes taken out of their paycheck?
Every person who earns money working in the U.S. is supposed to pay federal income tax. You’re also required to contribute to Social Security and FICA. Most state governments charge a state income tax, too.
Since the government expects you to pay taxes, they make it easy for you — they take it directly out of your wages. This is called withholding. As a result, the amount of money you take home will not be equal to the amount you earned.
Your gross income is the amount of salary or wages your employer paid you before any tax was taken. But your net income is the money you take home after you have paid income tax, Social Security, and FICA.
Understanding your tax filing status as a teen
Unless you are married, the filing status on your first tax return should be single.
The IRS cares about your filing status because it helps them understand which income tax bracket to put you in. Single people, married couples, people with dependents, and widow(er)s are put in different tax brackets, based on their filing status.
How income tax brackets are used to determine your taxes
How do you know how much you owe in taxes? There’s some math involved. The amount of tax you pay is a percentage of your total taxable income for the year, this is your tax rate.
The government decides how much tax you owe by dividing your taxable income into chunks — also known as tax brackets. Each bracket gets taxed at a different rate.
The U.S. has a “progressive” tax system – meaning people with higher taxable incomes pay higher federal income tax rates. If a person’s highest taxable rate is 35%, then we say they are in the 35% tax bracket. If the highest tax rate you will pay is 10%, you are in the 10% tax bracket.
How do teens file taxes?
Filing your taxes online is pretty straightforward. TaxSlayer offers step-by-step guidelines, so it’s easy to enter your income and other important information in the right place. When you’re finished, all the calculations are done for you, so you can rest assured your return is accurate.
Here’s how to get started:
- Determine if you need to file taxes – First things first, figure out if you’re required to file a tax return. Not everyone needs to file, especially if your income is below a certain threshold, which can vary depending on factors like age and filing status. However, filing can still be beneficial as you might be eligible for a refund.
- Gather your tax documents – Collect all your documents before you start the filing process. If you’ve had a job, your employer should send you a W-2 form that reports your wages and the taxes withheld from your paycheck. Other documents might include 1099 forms if you’ve done freelance work, earned interest from a bank account, or received different types of income. Plus, you’ll need your Social Security number. Make sure you have that handy.
- Choose the best software to meet your needs – Selecting the right tax software can make all the difference. TaxSlayer makes it easy to file your tax return. Plus, if your tax situation is straightforward and your only tax document is a W-2 form, you could qualify to use TaxSlayer Simply Free to file your taxes.
- File your return – When you file with TaxSlayer, you’ll be asked easy questions about your income, and you’ll get all the answers off your W-2. Your info will be automatically calculated and entered on your IRS Form 1040. This is the official name of your federal tax return. We’ll guide you through the process so you don’t miss any steps or potential tax breaks.
The deadline to file your taxes is usually April 15th unless that date falls on a weekend or holiday. Starting early gives you plenty of time to gather documents and address any questions you might have.
What you need to file your first tax return
Getting into your first tax return can feel like a massive leap into adulting, especially if you’re just starting to get a handle on your finances. But we’ve got you covered!
Once you know exactly what info and documents to pull together, the whole thing gets way easier. So, here’s a list of everything you need to tackle your first tax return:
- Your W-2 – Your employer should send your W-2 in the mail or electronically in January.
- Your legal name and birth date – Accuracy in personal information is a must. The name and birth date on your tax return must match the details on your Social Security card to avoid any processing delays with the IRS.
- Your tax ID number –This will most likely be your Social Security number (SSN). If you don’t know your SSN, you can find it on your Social Security card. If you don’t have a SSN, you will need an Individual Taxpayer Identification Number (ITIN). The IRS uses this for security purposes to make sure you are who you say you are.
- A TaxSlayer account – To file your taxes, you’ll need to create a TaxSlayer account. This requires a unique username and password. Registration is free, and even minors can set up their account. Starting early will give you ample time to familiarize yourself with the platform.
Why do we get money back from the IRS?
A tax refund is when the federal or state government reimburses a taxpayer for any extra taxes they’ve paid out during the year.
A tax return is the document or documents you fill out and submit to the IRS. The info you enter on your tax return is used to calculate whether your employer withheld too much, too little, or just enough from your paycheck to cover the taxes you owe. If too much was withheld, you will receive a refund.
Frequently asked questions about teens and taxes
Dealing with taxes can feel like trying to solve a mystery with no clues, right? But it’s cool, we’ve got your back.
Do minors have to pay taxes?
Absolutely, if you’re earning cash, Uncle Sam wants you to pay taxes, no matter your age. If you’ve got income from a summer gig or any job, you might need to file a tax return, especially if you earn more than the standard threshold set by the IRS.
At what age do you start paying taxes?
When it comes to taxes, age is just a number. What really matters is how much you’re making. If your income exceeds certain limits, you’ve got to file a tax return, regardless of if you’re 15 or 50.
Do I have to pay taxes if I have a part-time job?
Yes, part-time or full-time, the tax rules don’t discriminate. If you’re earning over a specific amount, you’ll need to file a tax return. Plus, you’ll see taxes taken out of your paycheck for Social Security and Medicare no matter how little you earn.
Do parents report their child’s income on their tax return?
Not typically. If you’re making your own money, you’re responsible for filing your own tax return. However, there are some exceptions, like when a child has income from interest, dividends, or capital gains. In those cases, parents might be able to include your income on their return, but that’s more the exception than the rule.
Do minors have to pay capital gains tax?
If you’re investing and making money from those investments, then yes, you might have to pay capital gains tax, regardless of your age. The tax rate can depend on how long you’ve held the investment and how much money you make in a year.
