DO TEENS HAVE TO FILE TAXES ? HERE'S WHAT YOU NEED TO KNOW
Updated: 14 hours ago
What You'll Learn
Talking about taxes might not sound like the most exciting topic for teens, but it's an important one. After all, no one wants to be caught off guard by Uncle Sam. Whether you've got a part-time gig, a side hustle, or even a summer job, understanding how taxes work can save you time and stress.
At What Age Do Teens Have to Pay Taxes?
There's no magic age when teens suddenly have to start paying taxes. Instead, it depends on your income. For the 2024 tax year, teens must file a tax return if they earned more than $13,850 in wages or salary (the standard deduction) or if they made more than $1,250 in unearned income (like investments). Even if you earned less, filing a return might be worth it if you had taxes withheld and want to get that money back.
What About Side Jobs Like Babysitting, Lawn Mowing, or Tutoring?
Great question! Income from babysitting, lawn care, or other freelance gigs is considered self-employment income. If you earn more than $400 from your side hustle, you'll need to report it and may owe self-employment taxes. The IRS considers these types of earnings as running your own mini-business, which means you're also responsible for tracking your income and expenses.
How Do Tax Brackets Work?
The U.S. tax system uses brackets, meaning different portions of your income are taxed at different rates. Here's a simplified example for the 2024 tax year:
10% on income up to $11,000
12% on income between $11,001 and $44,725
22% on income between $44,726 and $95,375
Let's say you earned $15,000 this year. The first $11,000 would be taxed at 10%, and the remaining $4,000 would be taxed at 12%. So, you’re not paying 12% on your whole income—only on the portion that falls in that bracket.
Check out this quick explainer video
Gross Income vs. Net Income vs. Taxable Income
These terms may sound like accountant jargon, but understanding them is key to knowing how much you really take home:
Gross Income: The total amount you earn before any deductions.
Net Income: What you actually take home after taxes, Social Security, and other deductions.
Taxable Income: The portion of your income that the IRS calculates your taxes on (after deductions and credits are factored in).
For example, if you earned a gross income of $5,000 from your job and spent $500 on work supplies, your taxable income might be $4,500 after deducting expenses.
How Can Teens File Taxes?
Filing taxes might seem overwhelming, but it's easier than you think. Here's a step-by-step guide:
Gather Your Documents: You'll need your W-2 (from your employer) or 1099 (for contract or freelance work).
Determine Your Filing Status: Most teens will file as "Single."
Use Tax Software or Forms: Platforms like TurboTax, H&R Block, or IRS Free File can simplify the process. If you prefer the old-school method, Form 1040 is your go-to. (Don't worry, you can also practice with KidVestors if you need to warm up first).
Claim Any Deductions or Credits: Depending on your situation, you may qualify for education credits or deductions for expenses like job-related supplies.
Submit Your Return: Electronic filing is the fastest and easiest way to get your refund.
What Documents Do Teens Need to File Taxes?
Before jumping into filing, make sure you have these documents handy:
W-2 Form (for wages)
1099 Form (for freelance or side gigs)
Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)
Bank Account Information (for direct deposit)
Records of Income and Expenses (especially for self-employment)
Any Tax Forms for Investments (like a 1099-DIV if you earned dividends)
How KidVestors' Tax Curriculum and Simulation Can Help
If taxes feel like decoding a secret language, KidVestors has you covered! Our interactive tax curriculum and simulation helps students learn taxes and file a tax return, helping teens learn the ropes of filing taxes in a stress-free, gamified way.
Students can practice filing returns, understand deductions, and see how their financial decisions impact their tax outcomes—all before dealing with the real thing.
By combining engaging lessons with hands-on simulations, KidVestors empowers teens to confidently manage their taxes (and maybe even teach their parents a thing or two!).
At The End Of The Day...
Taxes don't have to be scary. With a little knowledge and preparation, teens can navigate their tax responsibilities like pros. Whether you're working a part-time job, hustling with a side gig, or just curious about how taxes work, learning these basics now will pay off for years to come. And remember, KidVestors is here to make financial literacy (yes, even taxes) fun and approachable!
Get started with KidVestors today - Enroll Your Students
See how it works - View Demo
Financial Education and Investing for Kids and Teens
Comments