How to File Income Taxes if You Are Under 18 & Working

  Reviewed by: Ryan Cockerham, CISI Capital Markets and Corporate Finance      Updated November 02, 2018
  Written by: Chris Brantley
Check out IRS guidelines to determine if you need to file taxes.

Getting your first job is a right of passage. However, you may own income tax if you're under 18, even if your parents or someone else claims you as a dependent on their taxes. It all comes down to how much money you make. You'll have to prepare a return if you earn more than $12,000 at a job during the 2018 tax year. However, if you earn less, you still should file a return if your employer paid federal taxes on your behalf, as you may qualify for a refund.

Tips

  • If you are under 18 and employed, you will be required by the federal government to file a tax return when your income exceeds $12,000. Fortunately, individuals being claimed as dependents by their parents can file a tax return in much the same fashion as anyone else using the standard IRS Form 1040.

Am I Considered a Dependent?

The Internal Revenue Service allows parents and guardians to receive a break on their taxes for teens and the costs associated with providing financial support for dependents. You may qualify as a dependent if you live with a parent or guardian for more than half of the year and they provide more than half of your financial support. Your dependency status continues until you turn 19 – or 24 if you go to school full-time.

What Is Earned Income?

It really doesn't matter how adults earn money, the IRS treats earned and unearned income – investment income – the same. When you're a teen, jobs don't matter as much as either, but how much you earn does. However, as a minor, income from a job is treated differently than income generated by accounts that produce interest and dividends. If you get paid an hourly wage or salary, you've earned income in the eyes of the IRS and will pay taxes – no matter your age – if you reach $6,350 in earnings for 2017 and $12,000 for tax year 2018. This substantial increase from 2017 figures is due to new tax reforms, also known as the Tax Cuts and Jobs Act that largely went into affect for tax year 2018.

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Unearned Income and Investments

Some bank accounts and other investments, like bonds, pay you a percentage of your account balance in the form of interest. On the other hand, some companies pay dividends – a piece of their earnings based on the number of shares of stock you own. If you own these types of accounts or stock, and you receive more than $1,050 in interest or dividends, you'll have to file a return.

Filling Your Taxes and Form 1040

When you start working, you might have wondered at what age do you have to pay taxes. The IRS is clear on filing income tax under 18 – if you earn income, you can be taxed on it. If you determine you need to file taxes, complete Form 1040 or Form 1040EZ, a quicker, simpler version of the 1040 for taxpayers without dependents. Not everyone chooses to file the 1040EZ and both come with an instruction booklet that gives you step-by-step instructions for filling out the forms. IRS.gov also provides printable forms and e-filing options. You’ll also use the W-2, sent to you by your employer. If necessary, reference any 1099-INTs and 1099-DIVs for your unearned income.

About the Author

Chris Brantley began writing professionally for a financial analysis firm in 1997. From 2000 to 2004, he worked as a financial advisor, specializing in retirement planning and earned his Series 7, Series 66 and insurance licenses. Brantley started his full-time writing career in 2012 and has written for a variety of financial websites, including insurance, real estate, loan and investment sites. He holds a Bachelor of Arts in English from the University of Georgia.

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