Which of the Recommendations Would You Use to Maximize Your Tax Refund as a High School Student?

Getting a tax refund as a high school student might seem unlikely, but certain credits and deductions can help lower taxable income and increase the amount refunded. Even with a part-time job or side hustle, understanding tax benefits ensures you’re not leaving money on the table.

Filing Threshold

Determining whether to file a tax return starts with understanding the IRS income limits. For 2024, a single dependent must file if their earned income exceeds $14,600. However, unearned income—such as interest from a savings account—has a much lower threshold of $1,250.

Even if earnings fall below these limits, filing can still be beneficial. Employers withhold federal income tax from paychecks, and the only way to get that money back is by filing. For example, if a student earned $8,000 from a part-time job and had $500 withheld, they could receive a full refund. Additionally, self-employment income above $400 requires filing due to self-employment tax obligations.

Credits and Deductions

Tax credits and deductions can reduce tax liability or increase a refund. While high school students may not have many deductible expenses, some tax benefits still apply.

Education Credits

Students taking college courses in high school may qualify for education-related tax benefits. The American Opportunity Tax Credit (AOTC) allows eligible students to claim up to $2,500 per year for tuition, fees, and course materials. Up to $1,000 of this credit is refundable, meaning it can be received as a refund even if no tax is owed.

Another option is the Lifetime Learning Credit (LLC), which provides up to $2,000 per tax return for tuition and fees. Unlike the AOTC, the LLC is not refundable but can reduce tax liability to zero. Students or their parents can claim these credits, but only one can be used per student per year. Keeping records of tuition payments and 1098-T forms from educational institutions is necessary to claim these benefits.

Earned Income Credit

The Earned Income Tax Credit (EITC) helps low- to moderate-income workers, and some high school students may qualify. For 2024, a single filer with no dependents must have earned income below $17,640. The maximum credit for a taxpayer without children is $632.

To claim the EITC, the student must have earned income from wages, salaries, or self-employment. Investment income must also be below $11,600 for the year. The credit is refundable, meaning it can increase a refund even if no tax is owed. Filing a tax return is required, and students must meet all eligibility criteria, including age requirements—generally, filers must be at least 19 unless they are a qualified former foster or homeless youth, in which case the minimum age is 18.

Standard Deduction Considerations

The standard deduction reduces taxable income. For 2024, the amount for single filers is $14,600. However, dependents claimed on someone else’s tax return have a different calculation: the greater of $1,250 or their earned income plus $400, up to the $14,600 limit.

For example, if a student earns $5,000 from a part-time job, their standard deduction would be $5,400 ($5,000 + $400), meaning they owe no federal income tax. If they earn $15,000, they can claim the full $14,600 deduction, leaving only $400 as taxable income.

Understanding how the standard deduction applies helps students determine whether they need to file and whether they will owe taxes. If their income is below the deduction amount, they may still want to file to claim a refund of any withheld taxes.

Withholding Adjustments

Many high school students have taxes withheld from their paychecks, but in some cases, this isn’t necessary. When starting a job, employers require workers to complete Form W-4, which determines how much federal income tax is withheld. Since most students earn below the taxable income threshold after deductions, adjusting withholding allowances can prevent unnecessary tax withholdings and increase take-home pay.

If a student expects to owe no federal income tax, they can claim exempt status on their W-4, meaning no federal income tax will be withheld. To qualify, they must have had no tax liability in the previous year and expect none in the current year. Checking the “Exempt” box on Line 4c of the W-4 prevents unnecessary withholdings, though Social Security and Medicare taxes will still be deducted.

For those who had too much withheld, the only way to recover that money is by filing a tax return. Reviewing pay stubs regularly can help identify over-withholding early. If too much is being deducted, submitting an updated W-4 to the employer can correct the issue. The IRS Tax Withholding Estimator, available on the IRS website, can help determine the right amount to withhold based on expected income and deductions.

Documenting Income and Expenses

Keeping organized financial records ensures accurate tax filing and maximizes potential refunds. Proper documentation helps report all sources of income correctly and claim eligible deductions or credits. This is especially important for students earning income from multiple sources, such as wages from part-time jobs, freelance work, or tips.

For students receiving wages from an employer, the Form W-2 summarizes total earnings and tax withholdings for the year. Employers must provide this form by January 31, and it should be reviewed carefully for accuracy. Any discrepancies should be addressed immediately with the employer. Those who earn money through contract work or self-employment, such as tutoring, babysitting, or online sales, may receive a Form 1099-NEC if they earned at least $600 from a single client. Even if no 1099 is issued, all earnings must still be reported.

Tracking expenses related to self-employment or side income can reduce taxable income. Keeping receipts for business-related costs, such as supplies, advertising, or transportation, allows for deductions that lower tax liability. Using accounting software or a simple spreadsheet can help categorize expenses and ensure that deductible costs are properly documented.