I’m 15 and Earned $1450. Should I File a Tax Return?

Understanding tax obligations can be complex for young individuals. Whether you need to file a tax return depends on specific Internal Revenue Service (IRS) rules, based on income level and dependent status. For 2024, specific guidelines apply to dependents with earned income.

Determining Filing Requirements

If you are claimed as a dependent, your standard deduction is limited to the greater of $1,300 or your earned income plus $450. This amount reduces your taxable income, and if your total income falls below this deduction, you generally do not owe federal income tax. Earned income primarily includes wages, salaries, and tips received from a job.

For someone like Jason, who earned $1,450 in wages during the year, we can apply these rules. His standard deduction would be the greater of $1,300 or his earned income ($1,450) plus $450, which totals $1,900. Since his earned income of $1,450 is less than his calculated standard deduction of $1,900, his taxable income is effectively zero. Therefore, based solely on his earned income, Jason would not be legally required to file a federal income tax return for the 2024 tax year.

When Filing Makes Sense

Even if you are not legally required to file a tax return, there are situations where doing so is beneficial. The primary reason for filing when not mandated is to claim a refund of any federal income tax that was withheld from your pay. Employers often withhold a portion of an employee’s wages for federal income tax, even if the employee’s annual income is below the filing threshold.

If your Form W-2, Wage and Tax Statement, shows an amount in Box 2 for federal income tax withheld, it means money was sent to the IRS on your behalf. Because your income of $1,450 is below your standard deduction, you likely overpaid your taxes. Filing a return allows the IRS to process your information and issue a refund for the amount overpaid.

However, if Box 2 on your W-2 shows zero, meaning no federal income tax was withheld, there is generally no refund to claim. In such a scenario, if you are not otherwise required to file, there would be no financial incentive to submit a tax return. For a young person with only summer job earnings, the main benefit of filing is typically recovering withheld taxes.

Gathering Your Information for Filing

Preparing to file your tax return involves collecting several key documents. The most important document you will need is Form W-2, Wage and Tax Statement, provided by your employer by late January. This form reports your annual wages and the amount of federal, state, and local taxes withheld from your pay.

On your W-2, you will find your total wages in Box 1 and the amount of federal income tax withheld in Box 2. Other important details on the W-2 include your employer’s identification number and your Social Security wages and Medicare wages. In addition to your W-2, you will need personal information such as your full legal name, current address, date of birth, and your Social Security number (SSN).

Having your Social Security number readily available identifies you to the IRS. If you expect a refund via direct deposit, you will also need your bank account details, including the routing and account numbers. Collecting this information beforehand streamlines the process.

Steps to Filing Your Tax Return

After gathering your W-2 and personal details, you can file your federal income tax return. One common method is using tax preparation software, found commercially or through programs like IRS Free File, available to eligible taxpayers. These platforms guide you through entering information from your W-2 and other sources.

Alternatively, you can file your tax return by paper. This involves obtaining forms like Form 1040 and any necessary schedules from the IRS website or by mail. Then, manually fill out the forms with your income and withholding information, sign them, and mail them to the IRS.

Regardless of the method chosen, accurate entry of information from your W-2 and personal records is important. After submitting your return, if you filed electronically, you typically receive a confirmation of acceptance. If a refund is due, processing time can vary, but direct deposit is generally the fastest way to receive funds.