Back to lessons
🧾
Taxes
Taxes: What Every Teen Must Know
Understand W-2s, tax brackets, deductions, and how to file your first tax return.
6 min read Earn 75 XP 4 sections
1
Why taxes exist
Taxes fund public goods: schools, roads, healthcare, defense. In the US, you pay federal income tax, state income tax (most states), Social Security (6.2%), and Medicare (1.45%). Employers withhold these from your paycheck automatically.
2
Tax brackets explained
The US uses progressive taxation — you pay higher rates only on income above each threshold, not on all income. In 2024:
• 10% on first $11,600
• 12% on $11,601–$47,150
• 22% on $47,151–$100,525
Earning $50,000 doesn't mean 22% on all of it.
• 10% on first $11,600
• 12% on $11,601–$47,150
• 22% on $47,151–$100,525
Earning $50,000 doesn't mean 22% on all of it.
Your effective tax rate is almost always lower than your marginal rate.
3
Your W-2 and 1099
W-2: from employers, shows wages and withholdings. 1099: from freelance work, gig economy, investments. If you earned over $400 from freelance work or $12,950+ total, you must file. Many teens get a refund because employers withhold more than needed.
4
Filing your first return
Use IRS Free File if income < $79,000. Takes about 30 minutes:
1. Gather W-2s and 1099s
2. Enter info at IRS.gov or FreeTaxUSA
3. Claim standard deduction ($14,600 for single filers)
4. Submit and wait for refund (2–3 weeks via direct deposit)
1. Gather W-2s and 1099s
2. Enter info at IRS.gov or FreeTaxUSA
3. Claim standard deduction ($14,600 for single filers)
4. Submit and wait for refund (2–3 weeks via direct deposit)