Does My Teenager Have to File a Tax Return?

Many parents and teenagers wonder if a tax return is necessary, especially as young individuals begin earning income. The requirement for a teenager to file a federal income tax return for the 2023 tax year depends on their income level and the types of income received. This article explains the circumstances under which a teenager may need to file a tax return.

Determining Filing Requirements

Most teenagers are considered dependents for tax purposes, meaning another taxpayer, typically a parent, can claim them on their own tax return. This dependent status influences their individual tax filing obligations. Even as a dependent, a teenager may be required to file a tax return if their income surpasses certain IRS thresholds.

For the 2023 tax year, the standard deduction for a dependent is calculated as the greater of $1,250 or their earned income plus $400. However, this amount cannot exceed the standard deduction for a single individual, which was $13,850 for 2023. This calculation helps determine the baseline income a dependent can earn before a filing requirement is triggered.

Earned income includes wages, salaries, tips, and professional fees, as well as taxable scholarship and fellowship grants. A teenager must file a tax return if their earned income for 2023 was more than $13,850, which is the standard deduction amount for a single filer. This threshold applies even if they are claimed as a dependent on someone else’s tax return.

Unearned income, conversely, comes from sources not related to work or services, such as interest, ordinary dividends, and capital gain distributions. If a teenager’s unearned income alone was more than $1,250 in 2023, they are generally required to file a tax return.

When a teenager has both earned and unearned income, their filing requirement depends on their gross income, which is the total of both types. For 2023, a dependent must file if their gross income exceeded the greater of $1,250 or their earned income (up to $13,450) plus $400.

Special rules apply to self-employment income, which typically comes from freelance work, gig economy jobs, or running a small business. A teenager must file a tax return if their net earnings from self-employment were $400 or more in 2023. This lower threshold ensures that Social Security and Medicare taxes are properly reported.

There are also situations where filing a tax return is advisable even if a teenager’s income falls below these thresholds. For instance, if federal income tax was withheld from their wages, filing a return is necessary to claim a refund of that withheld money. A return might also be required to claim certain refundable tax credits, such as the Earned Income Tax Credit or the Additional Child Tax Credit, if they qualify. Filing is mandatory if they owe special taxes, such as Social Security and Medicare taxes on unreported tips, or uncollected Social Security and Medicare taxes on group term life insurance.

Gathering Necessary Information

Once it is determined that a tax return needs to be filed, collecting all the required documents and information is the next step. Having these items organized before starting the tax preparation process can simplify the entire experience. This preparation involves gathering both personal details and various income statements.

Essential personal information includes the teenager’s full legal name, current address, date of birth, and their Social Security number (SSN). Ensuring the accuracy of this personal data prevents delays in processing the return.

Income documents are a primary component of the information gathering process. Form W-2, Wage and Tax Statement, is provided by an employer and details the wages earned and any federal income tax withheld from paychecks. This form is typically issued by January 31st of the year following the tax year.

For other income, a teenager may receive:
Form 1099-INT for interest income
Form 1099-DIV for dividend income
Form 1099-NEC for nonemployee compensation (e.g., from freelance or gig work)
Form 1099-MISC for miscellaneous income
Form 1099-B for proceeds from stock or other security sales

These forms generally arrive by the end of January.

Beyond these income statements, any records of deductible expenses should be collected, especially if the teenager had self-employment income. These expenses, which could include costs for supplies or business-related services, can reduce their taxable income. Organizing all these documents ensures that all relevant financial activities for the tax year are accurately reported.

Methods for Filing

After all necessary information and documents have been gathered, there are several methods available for preparing and submitting a tax return. Each option offers a different level of assistance and convenience, catering to various preferences and complexities of the tax situation. The choice of filing method depends on individual circumstances and comfort levels with tax preparation.

Many individuals opt to use commercial tax software programs, which guide users through the filing process with step-by-step questions. These software options can assist with calculating income, deductions, and credits, and often allow for electronic filing (e-filing) directly with the IRS. While some versions require a purchase, free versions may be available for taxpayers with lower incomes.

Another option is the IRS Free File Program, which allows eligible taxpayers to prepare and e-file their federal tax returns for free. This program is available through various tax software providers that partner with the IRS, typically based on a taxpayer’s Adjusted Gross Income (AGI). It provides guided tax preparation, making it accessible for many filers.

For those who prefer a traditional approach, downloading and printing official IRS forms directly from the IRS website is an option. These forms can be filled out manually and then mailed to the appropriate IRS processing center. This method requires careful attention to detail to ensure accuracy, as there is no software to check for errors.

Seeking assistance from a tax professional is also a viable method, particularly if the teenager’s tax situation is complex or if the family desires professional guidance. Tax professionals can prepare and file the return on the taxpayer’s behalf, ensuring compliance and maximizing eligible deductions or credits. This can be a beneficial choice for those who feel less confident navigating tax laws independently.