Tax Basics for Teens: Filing Your First Tax Return
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Updated for tax years 2023 and 2024.
Are you filing your taxes for the first time this year? Filing an income tax return may sound daunting if you’ve never done it before. But the good news is that most teen tax returns are simple to do — you just need to familiarize yourself with some tax basics.
Is a teenager required to file taxes?
As a taxpayer, you don’t need to file a tax return if you earned less than the standard deduction, which is $14,600 for a single filer in 2024 (up from $13,850 in 2023). However, if the government owes you a tax refund, you will want to file a tax return to get that money back.
If you earned more than $400 by working a job such as babysitting or doing yard work in your neighborhood, like mowing lawns or raking leaves, the IRS considers you to be self-employed, regardless of your age. Because of these filing requirements, you will need to file a tax return to report that taxable income.
Another exception to the standard deduction limit is if you earned more than $1,300 in unearned income in 2024 (typically from investments or interest rather than a job). If, for example, you invested in crypto or traded stocks as a minor, you may be required to file a tax return even if you made less than the standard deduction.
What is the tax rate for a teenager?
The rate you are taxed depends on how much money you earn throughout the year. Your annual income determines which income tax bracket(s) you are in. Here are the tax brackets for 2024:
| Tax rate | Single filer | Joint filers | Married filing separately | Head of household |
| 10% | $0 to $11,600 | $0 to $23,200 | $0 to $11,600 | $0 to $16,550 |
| 12% | $11,601 to $47,150 | $23,201 to $94,300 | $11,601 to $47,150 | $16,551 to $63,100 |
| 22% | $47,151 to $100,525 | $94,301 to $201,050 | $47,151 to $100,525 | $63,101 to $100,500 |
| 24% | $100,526 to $191,950 | $201,051 to $383,900 | $100,526 to $191,950 | $100,501 to $191,950 |
| 32% | $191,951 to $243,725 | $383,901 to $487,450 | $191,951 to $243,725 | $191,951 to $243,700 |
| 35% | $243,726 to $609,350 | $487,451 to $731,200 | $243,726 to $365,600 | $243,701 to $609,350 |
| 37% | $609,351 or more | $731,201 or more | $365,601 or more | $609,350 or more |
And here 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, let’s say you earned $15,000 as a single filer in 2024. Using the 2024 chart above, you can see that the first $11,600 you made would be taxed at 10%, and the remaining $3,400 would be taxed at 12%.
What kinds of taxes do teenagers have to pay?
As an employee, you’ll need to pay federal income tax. If you live in a state with income tax, you’ll need to pay state income taxes as well, which means filing a state tax return in addition to a federal tax return.
Luckily, if you e-file with TaxAct®, we can pull information from your federal return to partially fill out your state return, making the process quicker and easier than filing both returns from scratch. Depending on where you live, you could owe local taxes to your city or county as well.
You’ll also need to pay FICA tax, sometimes called the payroll tax. This includes your Social Security and Medicare taxes. If you are a W-2 employee, your employer will pay for half of your FICA tax, making your Social Security tax rate 6.2% and your Medicare tax rate 1.45%.
What’s the difference between net income and gross income?
If you’re an employee, the government automatically takes the taxes you owe out of each paycheck. They call this withholding. Due to withholding, your take-home pay is the amount of money you earned minus taxes — also referred to as your net income. The amount you earned before taxes were taken out is called your gross income.
How do I file my taxes for the first time?
To start filing your first tax return, you’re going to need the following information:
- Your full legal name and birthday
- Your tax identification number (TIN) – this is typically your Social Security number
- Your tax filing status – most likely single, unless you are married. If you’re unsure about you’re filing status, our tax filing software can help you decide which option is best for you.
- Your Form W-2 from your employer if you’re an employee
- Your dependency status (we’ll go over this in a moment)
- A free TaxAct account if you’re filing with us
What are some tax benefits for teens?
As we said before, filing a tax return could mean getting a tax refund of any excess taxes that were withheld from your paycheck. So even if you made less than the standard deduction, it’s still a good idea to file.
Many tax breaks depend on your dependency status. If you rely on your parents or guardian for more than half of your financial support, you could be considered a dependent if you are under age 19 or under age 24 if you are a full-time student. If you can be claimed as a dependent on someone else’s tax return, certain tax credits you might qualify for could instead be passed on to whoever is claiming you as a dependent.
One potential tax break for teen students is the student loan interest deduction. If you took out student loans for yourself, you could take a deduction for the interest you paid on those loan(s) — up to $2,500 per year. You can take this deduction even if you don’t itemize your deductions.
At what age can a teen claim a 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), so long as you are paying for your schooling and your parents can’t claim you as a dependent. The AOTC is a credit available for four years to undergraduate students enrolled at least half-time in an undergraduate program. The LLC is available for anyone taking higher education classes enrolled in at least one course.
You can’t claim both of these credits on the same tax return. If you qualify for both, it’s generally more valuable to claim the AOTC — this tax credit covers more qualified expenses and is partially refundable, unlike the LLC. Both tax credits are available to whoever pays for the schooling, student or parent, and students can’t claim these credits if they are dependents.
What are the consequences of not filing taxes?
Not filing your taxes can mean missing out on a tax refund at best and facing failure to pay penalties at worst. Even if you don’t technically need to file (for instance, you made less than the standard deduction), it’s a good idea to do so anyway to make sure you aren’t leaving any money on the table.
Individual tax returns are due by April 15. Be sure to file by the deadline to avoid a delayed refund or any potential failure to pay penalties if you owe taxes.
The bottom line
Filing taxes for the first time doesn’t need to be a stressful experience. With some basic knowledge, a tax preparation checklist, and a step-by-step tax prep guide for first-time tax filers like TaxAct at your fingertips, you’ll be ready to file with confidence this tax season.
This article is for informational purposes only and not legal or financial advice.
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File your taxes with confidence.
Your max tax refund is guaranteed.
