Teens & Taxes: Quick Tips for First-Time Filers (and Their Parents)

A mixed race African-American and Hispanic teenage boy working in a supermarket at the checkout counter.
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With the rise in minimum wages and the abundance of entry-level jobs available, many teens started working in 2021. The Department of Labor Bureau of Statistics said that 54.4% of young people ages 16 to 24 were employed in the summer of 2021.

See: Child Tax Credit Update: What is IRS Letter 6419?
Find: Child Tax Credit Guidance Updated by IRS

If your teen falls into this growing group, you could be grappling with a new situation this tax season: assisting your teen in filing — and them potentially paying — taxes. But even if your teen didn’t work a W-2 job, where the employer withholds taxes and issues a W-2 form, your teen might still have to file taxes if they had any income — earned or unearned — in 2021.

Does Your Teen Have to File Taxes?

Your teen will have to file taxes under three circumstances. If they have:

  • Earned income over $12,200 for the year
  • Unearned income (interest and dividends from investments) over $1,100
  • 1099-NEC income over $400
  • Scholarship or grant money that exceeds qualified education expenses

The IRS uses the example of William, a 16-year-old who works weekends during school and full-time during the summer, earning $12,700 in gross income. William’s mother claims him as a dependent, but he must still file taxes.

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If William’s job was a side gig where he earned 1099 income over $400, he would also have to file and pay self-employment taxes.

If your dependent child under age 19 has unearned income in the form of interest or dividends totally more than $1,100, you can choose to report the income on your own tax return, which can simplify tax filing for your family.

Gather Your Paperwork

As with adults who are getting ready for Tax Day, you’ll want your teen to gather all the necessary paperwork before they begin filing. This includes paperwork showing income and expenses related to work or school.

Get Help If Needed

Helping your teen file taxes for the first time can be confusing and stressful, especially if you’re also focused on your own tax paperwork. Don’t hesitate to hire a reputable tax professional to help guide you both through the process. Your teen will learn valuable lessons about working with professionals and you can have the peace of mind that the taxes are being filed correctly.

See: IRS: Free File Now Open, Do Your Taxes For Free
Find: There’s a New Free Service for Compiling Tax Data to Report Crypto and NFTs

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Establish Good Habits Today

Taxes are a part of life. It’s important to show your teen or child that taxes aren’t something to fear. Rather, they pay for important public services and keep the U.S. government running. However, it’s important to understand the tax laws — or hire someone who does — to ensure your teen isn’t paying more (or less) than what’s required.

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About the Author

Dawn Allcot is a full-time freelance writer and content marketing specialist who geeks out about finance, e-commerce, technology, and real estate. Her lengthy list of publishing credits include Bankrate, Lending Tree, and Chase Bank. She is the founder and owner of GeekTravelGuide.net, a travel, technology, and entertainment website. She lives on Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten, and three lizards of varying sizes and personalities – plus her two kids and husband. Find her on Twitter, @DawnAllcot.
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