Nobody has to make you file. So why would you?
The story so far Last year you started the campus job in July and worked 13 paychecks, for $8,450. Each one withheld $3.08, so $40.04 of federal tax went to the IRS. You also tutored on the side and earned $1,200, and your savings account paid $45 of interest. Now it's January, and envelopes are showing up. Do you have to file a tax return? Will you get money back, or owe it? This lesson walks you through your first return, line by line.
A tax return is a once-a-year form, Form 1040, where you add up your income and settle up with the IRS.
It's how withheld tax you didn't owe comes back to you, and how side-hustle tax gets paid. Skipping it can cost you a refund or add penalties.
Gather your forms, add up your income, subtract the standard deduction, figure the tax, then compare it with what you already paid.
Tax preparers, enrolled agents and CPAs file returns for clients. IRS agents process them. VITA volunteers do it free.
What you're looking at: a sketch of tax season. The forms and money from your year (top) all get added up on one Form 1040 (bottom), which ends with a refund or an amount you owe.
Your first return, start to finish.
A tax return looks scary, but for most students it's five lines of math. Here's what shows up in January, what counts as income, and how the five lines work, with your real numbers.
Part 1: the forms that arrive
Your tax return covers one calendar year, January to December, and you file it the next spring. To fill it in, you collect forms that the people who paid you send by the end of January.
Your employer sends a W-2. Box 1 is your wages for the year; box 2 is the federal income tax they withheld. Your bank sends a 1099-INT when it paid you $10 or more of interest.
- W-2
- Box 1 wages: 13 × $650 = $8,450. Box 2 withheld: 13 × $3.08 = $40.04.
- 1099-INT
- Interest from your savings account: $45.
- Tutoring
- Parents paid you by app. No form comes for the $1,200, but it still counts.
Part 2: what counts as income
Almost any money you earn counts, whether or not a form shows up. Some money you receive isn't income at all, because you didn't earn it.
- Wages from a job (W-2)
- Interest from a bank (1099-INT, or under $10 with no form)
- Side-hustle pay: tutoring, babysitting, selling crafts, gig apps, even with no form
- Gifts you get, like $200 from your grandma
- A friend paying you back their share of a pizza
- Last year's federal tax refund
- A scholarship spent on tuition and required books
Part 3: the five lines of Form 1040
Form 1040 is the return itself. Stripped down, it's five lines. We'll start with just the W-2 and the interest, and add the tutoring in Part 4. We'll also assume no one, like a parent, claims you as a dependent on their return.
- Total income. Add every income line: $8,450 + $45 = $8,495.
- Standard deduction. Subtract $16,100. Taxable income can't go below zero: $0.
- Tax. Run taxable income through the brackets from the last lesson: 10% × $0 = $0.
- Payments. What you already paid, mostly W-2 box 2: $40.04.
- Refund or owe. Payments − tax = $40.04 − $0 = $40.04 back to you.
- Refund
- You paid $40.04 during the year but owed $0, so the IRS sends you a $40.04 refund. E-file with direct deposit and most refunds arrive within 21 days.
Do you even have to file?
A single person under 65 has to file when their income is at least the standard deduction, $16,100 for 2026, or when they made $400 or more of side-hustle profit. Under both limits, you don't have to file. But filing is the only way to get withheld tax back. The IRS doesn't mail it automatically.
- Job and interest only
- $8,495 is under $16,100, so you don't have to file, but you'd leave $40.04 behind if you didn't.
- With the tutoring
- $1,200 of profit is over $400, so now you must file.
Part 4: side-hustle money
When you work for yourself, nobody withholds anything. You're the worker and the employer, so you pay both halves of Social Security and Medicare: 7.65% + 7.65% = 15.3%. That's called self-employment tax. It's figured on 92.35% of your profit, because the employer's half gets treated like a business cost. Profit is what you took in minus what the work cost you.
- Profit
- $1,200 of tutoring, with no costs: $1,200.
- Self-employment tax
- $1,200 × 0.9235 = $1,108.20. × 0.153 = $169.55.
- Half comes off income
- You get to subtract half of it from your income: $169.552 = $84.78.
- New bottom line
- Total income $8,495 + $1,200 − $84.78 = $9,610.22, still under $16,100, so income tax stays $0. Total tax: $169.55. Payments $40.04. You owe $129.51.
Keep a simple record of side-hustle money: who paid, how much and when. With no form, your record is the proof.
What you're looking at: a simplified Form 1040 for a single person filing for 2026, using the $16,100 standard deduction, the real brackets and self-employment tax. The summer internship is an extra example: its five paychecks withheld tax as if you earned that much all year, so most of it comes back. The gift shows that money that isn't income changes nothing.
Part 5: deadlines and free help
Returns for 2026 are due on Tax Day, April 15, 2027. If you need more time, an extension gives you until October 15 to file, but not to pay: anything you owe is still due in April, or interest and penalties start.
You don't need to pay anyone. IRS Free File gives free tax software to people under an income limit (about $84,000 in 2025), and VITA sites, run by IRS-trained volunteers at libraries and colleges, prepare returns free for people earning about $67,000 or less.
- Your plan
- File through Free File in February. Pay the $129.51 by April 15, 2027. It costs you $0 to file.
Two minutes. Just listen.
Tap any line to jump to it.
Sort the mail.
It's January. Eight things land on your desk. For each one, decide: does it go on your tax return, or is it not income? One try each.
What you're looking at: made-up mail and money for a student filing for 2026, sorted by U.S. federal tax rules.
The logic, step by step.
Every return, simple or huge, follows the same five steps. Here they are with the tutoring included.
Step 1: Total income
- Your year
- $8,450 + $45 + $1,200 = $9,695.
Step 2: Self-employment tax
- Tutoring
- $1,200 × 0.9235 × 0.153 = $169.55.
Step 3: Taxable income
- Taxable
- $9,695 − $84.78 = $9,610.22. Minus $16,100 is below zero, so $0.
Step 4: Total tax
- Total
- $0 + $169.55 = $169.55.
Step 5: Refund or owe
- Bottom line
- $40.04 − $169.55 = −$129.51. You owe $129.51 by April 15.
Worked example: no side hustle, plus an internship
- Income. Campus job $8,450 + summer internship $6,000 + interest $45 = $14,495.
- SE tax. No side hustle: $0.
- Taxable. $14,495 − $16,100 is below zero: $0.
- Tax. $0.
- Refund. Payments: $40.04 + $300.75 withheld by the internship = $340.79. $340.79 − $0 = $340.79 refund.
A tree writes down every year.
Cut across a tree trunk and you'll see rings. Each year a tree grows one new ring: wide in a wet, warm year, thin in a dry one. Scientists who study rings can read a tree's whole life, year by year, and even date old droughts.
What you're looking at: an illustration, not data. A slice of a tree trunk with its growth rings; the newest ring, on the outside, is highlighted.
Why this sticks. A tax return is your money's ring for the year. Everything from January to December goes into one record, and then the year is closed: next year starts a new ring. That's also why you keep each year's return and forms: like rings, they're your history if anyone ever asks. (It's the same idea behind our logo: rings that keep growing.)
The page you'd copy down.
- Tax return (Form 1040): one year, January to December, filed the next spring. Due April 15.
- W-2 from your employer: box 1 wages, box 2 federal tax withheld. 1099-INT from a bank: interest of $10 or more.
- Income counts even with no form (side hustles, interest under $10). Gifts you get, paybacks, last year's federal refund and scholarships spent on tuition and books aren't income.
- Five lines: total income → minus $16,100 → tax → minus payments → refund or owe.
- Must file if income is $16,100 or more, or side-hustle profit is $400 or more. Otherwise file anyway to get withheld tax back.
- Self-employment tax = profit × 0.9235 × 0.153. Half of it comes off your income. Keep records.
- Extension = more time to file (October 15), not to pay. Free help: IRS Free File, VITA.
Fill in the blanks
Grab a friend or a study group.
Mail sort race
One person reads out money someone got: a paycheck, a birthday check, Venmo for dog walking. Everyone shouts "income" or "not income" and explains why.
Five-line relay
Make up a student's year. Each person does one of the five lines of the 1040 and passes it on. Did the group get a refund or owe?
Find free help
Look up the closest VITA site to your school. Who runs it, and when is it open? Share it with a friend who files this year.
Just you and your money.
These stay on this device. Nobody else sees them.
Exam-style questions.
Written the way a college exam would ask them. Each right answer on the first try is worth 10 xp.
On the job: you're the VITA volunteer
Ana, 19, comes to your free tax table at the library with one W-2. While you talk, she mentions she also made $2,000 delivering food through an app last year. "But they never sent me a form, so I don't have to put it on, right?"
Your task: tell Ana whether the $2,000 goes on her return, what extra tax it brings and how much, and how she can make next year easier.
See a model answer
Yes, it goes on the return. Income counts whether or not a form shows up. With no costs to subtract, her profit is $2,000, which is over $400, so she has to file and report it.
The extra tax: she's self-employed for that work, so she pays both halves of Social Security and Medicare: $2,000 × 0.9235 = $1,847.00, × 0.153 = $282.59 of self-employment tax. Half of it, $141.30, comes off her income.
Next year: keep a log of every payout and her delivery costs, like miles driven, since costs lower her profit and her tax. Set aside about 15% of each payout so the bill isn't a surprise.
From settling up to planning every dollar.
What you're looking at: a map of where this lesson fits in the course. Read it left to right: the lesson that comes before, this lesson in the middle, and the later lessons that build on it.
- Before · Unit 2How taxes work
- You are hereFile your first tax return
- Next · Unit 3Make a budget
- Later · Unit 3High-yield savings
- Later · Unit 5401(k) and Roth IRA