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Tax Basics for Teens: Filing Your First Tax Return

by | Mar 1, 2024 | 2024, Tax Credits and Deductions, Tax planning, Taxes | 0 comments

Are you doing your taxes for the first time this year? Filing an income tax return for the first time might be intimidating. The good news is that most teen tax returns are straightforward to complete—you just need to be familiar with fundamental tax concepts.

Is an adolescent required to file taxes?

If your income is less than the standard deduction ($13,850 for a single filer in 2023), you are not required to file a tax return. If the government owes you a tax refund, you should file a tax return to get it.

If you earned more than $400 while babysitting or performing yard labor in your area, such as mowing lawns or raking leaves, the IRS considers you self-employed, regardless of your age. Due to these filing requirements, you must submit a tax return to disclose your taxable income.

Another exemption to the standard deduction limit is if you have more than $1,150 in unearned income (usually from investments or interest rather than an employment). If you bought in cryptocurrency or traded stocks as a minor, you may be compelled to submit a tax return, even if your earnings were less than the standard deduction.

What is the tax rate for a teen?

The tax rate you pay is determined by how much money you make over the course of a year. Your annual income decides which tax bracket(s) you fall into. These are the tax brackets for 2023.

Tax rate Single filer Joint filers   Married filing separately Head of household
10% $0 to $11,000 $0 to $22,000   $0 to $11,000 $0 to $15,700
12% $11,001 to $44,725 $22,001 to $89,450   $11,001 to $44,725 $15,701 to $59,850
22% $44,726 to $95,375 $89,451 to $190,750   $44,726 to $95,375 $59,851 to $95,350
24% $95,376 to $182,100 $190,751 to $364,200   $95,376 to $182,100 $95,351 to $182,100
32% $182,101 to $231,250 $364,201 to $462,500   $182,101 to $231,250 $182,101 to $231,250
35% $231,251 to $578,125 $462,501 to $693,750   $231,251 to $346,875 $231,251 to $578,100
37% $578,126 or more $693,751 or more.   $346,876 or more $578,101 or more


For example, assume you earned $15,000 as a single filer in 2023. Using the figure above, you can see that the first $11,000 you earn is taxed at 10%, while the remaining $4,000 is taxed at 12%.

What type of taxes are teens required to pay?

As an employee, you will have to pay federal income taxes. If you live in a state that has an income tax, you must also pay state income taxes, which requires submitting a state tax return in addition to a federal tax return.

You’ll also have to pay FICA, generally known as the payroll tax. This includes the Social Security and Medicare taxes.  If you are a W-2 employee, your company will pay half of your FICA tax, resulting in a 6.2% Social Security tax rate and a 1.45% Medicare tax rate.

What is the difference between net and gross income?

If you work, the government automatically deducts the taxes you owe from each paycheck. They call it withholding. Due to withholding, your take-home pay is the amount of money you received minus taxes, often known as your net income. Gross income refers to the amount you made before taxes were deducted.

How should I submit my taxes for the first time?

To file your first tax return, you’ll need the following information:

  • Your entire legal name and birthday.
  • Your tax identification number (TIN)—this is often your Social Security number
  • Your tax filing status is most likely single, unless you’re married. If you’re unclear about your filing status, our tax filing software will assist you choose the best choice for you.
  • If you are an employee, your employer’s Form W-2
  • Your dependence status (we’ll go over this shortly).

What are some of the tax benefits for teenagers?

As previously stated, completing a tax return might result in a refund of any excess taxes taken from your salary. So, even if your income in 2023 was less than the standard deduction, you should still submit your taxes.

Many tax incentives are based on your dependent status. If you rely on your parents or guardians for more than half of your financial assistance, you may be classified as a dependent if you are under the age of 19 or 24 if you are a full-time student. If you may be claimed as a dependent on someone else’s tax return, some tax credits that you may be eligible for may be passed on to the person claiming you as dependent.

The student loan interest deduction is one tax relief that young students may be eligible for. If you took out student loans for yourself, you may deduct the interest you paid on those loans, up to $2,500 each year. You can claim this deduction even if you do not itemize your deductions.

At what age may an adolescent get the student tax credit?

If you are an undergraduate student at a college or university, you can claim the American Opportunity Tax Credit (AOTC) or Lifetime Learning Credit (LLC), provided you are paying for your education and your parents cannot claim you as a dependent. The AOTC is a four-year credit for undergraduate students enrolled at least half-time in an undergraduate program. Anyone enrolled in at least one higher education course is eligible to join the LLC.

You cannot claim both of these credits on the same tax return. If you qualify for both, claiming the AOTC is often more advantageous because it covers more eligible costs and is partially refundable, unlike the LLC. Both tax credits are accessible to whoever pays for the education, whether a student or a parent, and students cannot claim them if they are dependents.

What are the implications of not submitting your taxes?

Not submitting your taxes might result in missing out on a tax return at best, and failing to pay penalties at worst. Even if you don’t technically have to file (for example, because you earned less than the standard deduction), it’s a good idea to do so to ensure you don’t leave any money on the table.

Individual tax returns are due on April 15, 2024, this year. If you owe taxes, make sure you submit by the deadline to avoid a delayed refund or failure to pay penalties!

The bottom line

Filing taxes for the first time does not have to be an unpleasant experience. With your partners at PSACPA, you will be prepared to file with confidence during tax season.



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