Top Money Lessons for Teens During Tax Season

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Tax season: The time of year when adults start stress-eating receipts and speaking in strange tongues like “adjusted gross income” and “itemized deductions.” But for teens? It’s the perfect opportunity to learn some seriously valuable money lessons—before they end up wondering why their first paycheck is missing half its digits.

If you have a teen in your house (or one who just appears when the fridge is full), tax season is your golden opportunity to teach them about money. Here are the top lessons they should learn now—before the IRS does it for them later.

1. Paychecks Aren’t as Big as They Look

Your teen finally gets that first job—flipping burgers, refereeing hockey games, or babysitting the neighbor’s kid who may or may not be part velociraptor. They’re expecting a fat paycheck… until they see the deductions.

Lesson: Taxes take a bite out of earnings. Explain gross pay vs. net pay, show them where their money is going (hello, Social Security and Medicare!), and remind them that even adults have to fight the urge to cry on payday.

2. The IRS Doesn’t Accept “Oops” as an Excuse

If your teen makes money—whether it’s through a W-2 job or freelancing (yes, that TikTok influencer side hustle counts)—they may need to file taxes. Waiting until April 14th to figure this out? Not a good plan.

Lesson: Taxes are serious business. Teach them about tax deadlines, filing basics, and why the IRS is not the kind of organization you ghost.

3. Free Money Exists (But Only if You Ask for It)

If your teen worked but made under the filing threshold, they might be due a refund. But if they don’t file? That refund stays with Uncle Sam.

Lesson: Show them how to file a simple tax return, so they don’t leave their money in the government’s pockets. (They wouldn’t just leave money in vending machines, would they?)

4. Side Hustles Come With Side Paperwork

Many teens make money online—reselling sneakers, tutoring, or running Etsy shops. The bad news? That extra income also comes with tax responsibilities.

Lesson: Self-employed teens may owe self-employment taxes and need to track income, expenses, and possibly make estimated tax payments. Being your own boss is cool—until tax season reminds you that your boss (the IRS) still wants their cut.

5. A Roth IRA: Future You Will Thank You

No teen wants to hear the word “retirement,” but the sooner they start saving, the better. If they have earned income, they can open a Roth IRA and let their money grow tax-free for decades.

Lesson: Explain compound interest in a way they understand: “Imagine your money is a snowball rolling downhill. The earlier you start rolling it, the bigger it gets.” That usually gets their attention—especially if they like money and snowball fights.

6. Tax Deductions: The Secret Weapon Against Paying Too Much

Teens don’t often get deductions, but it’s never too early to learn the concept. If they’re self-employed, did they buy supplies? Use part of their phone for business? Those might be deductible.

Lesson: Keep good records! No one wants to dig through months of Venmo transactions in April trying to remember if that $50 was for business expenses or overpriced movie popcorn.

Final Thoughts: Make Taxes Less Taxing

Tax season might not be exciting (unless you find excitement in paperwork, in which case, I have some forms for you), but it’s a prime time to teach teens about money. Help them understand where their paycheck goes, why filing taxes matters, and how to legally keep more of their money.

Because the best way to avoid future tax season panic? Learning young—and maybe keeping a stress ball nearby.

What’s the funniest reaction your teen has had to their first paycheck? Share in the comments!

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