There’s nothing quite like that first paycheck. Whether your child is working part-time, full-time, or picking up seasonal jobs, it's a huge milestone — and it’s exciting for the whole family!
As parents and guardians, you might have a few questions popping up, like:
• Does my child need to file a tax return?
• Can I include my child’s W-2 income in my own return?
• At what point does my child have to file?
Good questions — and the IRS has clear rules depending on whether your child’s income is earned (like wages and tips) or unearned (like bank account interest or dividends). Here's a quick snapshot:
Income Thresholds for Filing Requirements
Income Type | Tax Year 2025 | Tax Year 2024 |
|---|---|---|
Unearned Income (interest, dividends) | Over $1,350 | Over $1,300 |
Earned Income (wages, tips) | Over $15,000 | Over $14,600 |
Gross Income | More than the larger of: $1,350, or earned income (up to $14,550 + $450) | More than the larger of: $1,300, or earned income (up to $14,150 + $450) |
A Quick Example: A Teen with a Side Hustle
Let’s say your 17-year-old daughter worked part-time at a local café and also earned money babysitting and tutoring during 2025.
Here’s what she made:
• Café job (W-2 income): $6,800
• Babysitting and tutoring (self-employment
income): $2,900
• Savings account interest (unearned income): $100
• Total earned income: $9,700
• Total unearned income: $100
• Gross income: $9,800
Since her earned income is below the 2025 threshold of $15,000 and her unearned income is well below $1,350, she wouldn’t need to file based on those thresholds.
However, self-employment income over $400 means she must file a tax return due to self-employment tax obligations — even if she doesn’t owe regular income tax.
An Exciting Door Just Opened
Now that your child has earned income, a whole new world of opportunity becomes available — including ways to grow that money tax-free for the rest of their lives.
In fact, your child (or you, on their behalf) could start putting money away that can someday help pay for college, a first home, or retirement — with incredible tax advantages along the way.
This strategy can create a head start... but it’s a topic that deserves its own full spotlight.
Stay tuned for an upcoming article where we'll break down how to make the most of this powerful opportunity!
Have questions about your child’s taxes or financial future?
We’re here to help — send us an email, connect with us on social media, or schedule a time to meet at one of our offices!
Bjorn Swanson
Before You Sell Real Estate
Before selling real estate, understanding how the IRS classifies your property can quietly shape everything from your tax bill to the strategies still available before closing.
Catherine Witmer
Reverse 1031 Exchanges and Improvement Exchanges: A Comprehensive Guide
In competitive real estate markets where timing and property customization can determine long-term returns, reverse and improvement 1031 exchanges offer strategic pathways to secure high-value opportunities while preserving full capital gains tax deferral under strict IRS safe harbor rules.
Austin Zomer
Considering Seller Financing? What You Need to Know—and How a Long-Term Escrow Can Benefit You
Owner financing can expand your buyer pool and create steady income, but without the right structure it can quickly become complex—here’s why using a long-term escrow company may be the key to protecting your investment and keeping installment sales on track.
