The information in this article is up to date for tax year 2023 (returns filed in 2024).
Taxes are usually associated with adulthood, but if you’re a teen with a job or other streams of income, you may be required to file your own taxes. (Sorry to break it to you). But don’t let taxes add to your teen angst. We’ll break down the basics of taxes for teens so you aren’t overwhelmed come tax day.
Here’s what you need to know about teens and taxes:
Do Teens Have to File Taxes?
The big question is: Do teens have to file taxes? In a word: maybe!
If you’re a teen with a seasonal or part-time job, you may be required to file your own tax return. Being a minor won’t exempt you from paying taxes–but whether you need to file a separate return as a teen depends on a few things:
Dependency
Dependents typically don’t have to file separate tax returns unless their income exceeds a certain threshold. As a teen, you’re most likely listed as a dependent under your parents or guardians.
>>Read more: When Must a Dependent File a Tax Return
To qualify as a dependent, you must be under age 19 by the end of the tax year (or under 24 if you’re in school full-time), live with your parents for more than half the year, and not provide more than half of your financial support.
If you qualify as a dependent, the next thing to check is your income.
Income Thresholds
Your tax liability is generally based on specific income limits.
For tax year 2023, the IRS income thresholds are:
- $13,850 in earned income
- $1,250 in unearned income (e.g., dividends or interest)
In other words, teens who earned more than $13,850 in 2023 (i.e., the standard deduction) or $1,250 in unearned income, are required to file a tax return.
However, even if you earned less, you may still want to file your own tax return in order to claim certain tax credits. Additionally, if your employer withheld taxes from your paycheck, you may be owed a refund. To claim that refund, you’ll need to file your own tax return.
>>Not sure what to do? ezTaxReturn can help you determine if you should file taxes as a teen.
Note: If you do decide to file a tax return, your parents cannot include your income on their tax return. But you will need to report that you are a dependent when you file.
Taxable vs. Nontaxable Income
Generally, most forms of income are subject to tax. However, there are some exceptions. Understanding what income you owe taxes on as a teen will help you prepare your tax return accurately the first time.
Taxable income: Taxable income is any income that is subject to taxation. Most income falls under taxable income designation, including wages, commissions, tips, salaries, dividends, and self-employment income. This also includes income like babysitting money, side gigs, and money from a part-time or summer job.
Nontaxable income: Nontaxable income is income that is specifically exempted from taxation by law. This list is shorter, but the most relevant nontaxable income for teens includes gifts, inheritances, and qualified education income, such as scholarship or grant money.
>>Read more: Taxable Income vs. Nontaxable Income: Everything to Know
Keep in mind that scholarship funds must be spent on qualifying education expenses (such as tuition or books) to remain nontaxable. If you use any scholarship money to pay for non-qualified expenses, that portion of the funds are considered taxable income.
How to File Taxes as a Teen
Know you need to file taxes as a teen, but not sure where to start? Here’s what you do:
1. Gather Your Paperwork
To begin preparing your taxes, you’ll need income reports from your employer(s) and any other income stream, such as unearned income or scholarships, as well as your personal tax information. The specific forms you need will depend on what kind of income you received, but for simple returns, most teens will only need a Form W-2 and/or Form 1099-NEC for wages or self-employment income.
What You Need to File a Return
- Form W-2 or 1099-NEC: If you were employed in 2023, your employer will send you a Form W-2, which reports your wages earned and any taxes withheld. If you were self-employed, your client(s) will send you a Form 1099-NEC, which reports your nonemployee compensation.
- Tax ID number: For most people, this will be their Social Security Number (SSN). If you don’t have a SSN, you may need to apply for an Individual Taxpayer Identification Number (ITIN).
- Any additional paperwork showing income or expenses for school etc.
>>Read more: 2023 Beginner’s Guide to Common IRS Forms
2. Fill Out Form 1040
Once you have your tax information handy, you can fill out the IRS Form 1040.
Attach Schedule 1 to claim any deductions, such as self-employment tax. If you have any tax credits to claim, like education credits, you’ll fill that out on Schedule 3.
3. Submit Your Tax Return to the IRS
When you’ve completed all your tax forms, it’s time to submit! The deadline to file for tax year 2023 is April 15, 2024. But we recommend filing as soon as you can to avoid any late penalties and get your refund faster.
You can file your taxes online or by mail directly through the IRS or use a tax prep solution like ezTaxReturn to ensure everything is accurate and ready to go.
With ezTaxReturn, you don’t have to worry if you’re missing anything on your taxes. We walk you through the filing process every step of the way. Plus, simple federal returns are free to file–and we guarantee you’ll get the biggest refund possible with us.
Start filing today!
The articles and content published on this blog are provided for informational purposes only. The information presented is not intended to be, and should not be taken as, legal, financial, or professional advice. Readers are advised to seek appropriate professional guidance and conduct their own due diligence before making any decisions based on the information provided.
