Does My Teen Need to File Income Tax? - 2 Dads with Baggage
man and woman doing taxes at desk

Does My Teen Need to File Income Tax?

Recently our older daughter Sophia decided to get a job. She was motivated to start earning her own money, because she felt the weekly allowance we were giving her was not enough. I felt the same when I was her age, and started working as soon as it was legal. But that was a while ago, and I don’t remember anything about taxes. So I asked myself, does my teen need to file income tax?

Sophia at CMU
Getting Sophia ready for college, we’re helping her learn about taxes.

After a bit of research, it seems the short answer is yes.

Does My Teen Need to File Income Tax?

April 15 is staring us down, and we all begrudgingly prepare for filing our own income taxes. Each year, it’s the same drill. No one wants to do it, no one likes the idea of having to account for all that money in and out. And no one I know loves writing a check to the federal government. Yes, it is our civic duty and many important programs depend on us doing our share. But what about our kids? Do teens file income tax?

annual tax form 1040 and pen
It’s not fun, but it is necessary to learn how to file your taxes. (Photo credit: ronstik)

(I am not a tax expert, so please consult with one before doing anything. I’m just imparting what we’ve researched and learned.)

According to the experts, the fact that your child is listed as a dependent on your income tax does not excuse them. Your teen will still be expecting to file income tax under most circumstances.

When Does My Teen Need to File Income Tax?

Here are the issues that determine if your teen need to file income tax:

If your teen earned more than $12,200

If your teen received unearned income from investments of more than $1,100

The child’s gross income (earned plus unearned) is greater than the larger of $1,100 or earned income, plus $350

There are several expert interpretations of the law as it pertains to teens filing income tax.

According to tax attorney Stephen Fishman and his informative article about teen tax laws on NOLO.com, the parent may be liable for paying the tax if the child does not.

teen hispanic girl and dad with grey hair and glasses
This sweet girl is growing up!

Getting a Tax Refund for Teens

According to my own tax preparer and this article about teen income tax on Investopedia by Jim Probasco, your teen may be due a tax refund in certain circumstances. In Sophia’s case, she had federal taxes withheld from her paychecks in the amount of about $87 for 2019. Because she earned so little, it was unnecessary for her employer to withhold this income. Many do it automatically for all employees, so they aren’t technically wrong for doing this. But she deserves to have that money back.

IRS tax forms with tax refund check
Teens can file for a tax refund too. (Photo credit: NoDeroq)

In order to receive her $87 refund, Sophia must file her income tax forms. We can simply help her fill out the easy IRS Form 1040 and submit it for her refund from the federal government.

Again, each situation is different and I am not an expert. As parents, we researched these details for Sophia and are sharing them here in case you find yourselves in a similar situation.

Good luck!

Teaching Your Kids About Finances

For other tips on teaching your kids about finances:

Prepaid Cards Are the New Allowance

9 Tips for Planning College Tours for Your High School Kid

 

We can book your trip! Let us help you plan.

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