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When your teen gets their first paycheck and sees money 'missing' for taxes — that's the moment financial literacy becomes real.
Every teen remembers seeing their first paycheck: "I worked 20 hours at $12/hour — why is my check only $192 instead of $240?" This is the most teachable financial moment of their young life.
0-10%
Federal Tax Withheld
Usually $0 for teens
7.65%
FICA (SS + Medicare)
Always withheld, no refund
0-5%
State Tax
Varies by state
95%+
Refund Likelihood
Most teens overpay federal
Gross Pay
Hours × rate. This is what they earned BEFORE the government takes its share.
Federal Income Tax
Usually $0 if they earn under $14,600/year (2024 standard deduction). Still may be withheld and refunded.
FICA (Social Security + Medicare)
6.2% + 1.45% = 7.65%. Non-refundable. Goes toward their future Social Security.
State/Local Tax
Varies. Some states (TX, FL, WA) have no income tax.
Net Pay (Take Home)
What actually hits their bank account. Gross minus all deductions.
Receive W-2
Employer sends by Jan 31. Shows total wages and taxes withheld for the year.
Gather Documents
W-2, plus any 1099s from bank interest or self-employment.
File with Free Software
IRS Free File (under $79K AGI). FreeTaxUSA. TurboTax Free Edition.
Get Refund!
Direct deposit in 1-3 weeks. Most teens get back all federal tax withheld.
Do It Together, Not For Them
Does My Teen Need to File?
| Feature | Must File | Should File Anyway |
|---|---|---|
| W-2 income > $14,600 | Required | — |
| W-2 income < $14,600 | Not required | File to get refund of withheld taxes |
| Self-employment > $400 | Required (SE tax) | — |
| Investment income > $1,250 | Required (kiddie tax) | — |
Don't Skip Filing
Unlock the Roth IRA
Key Takeaways