As a high school student, chances are the tax form you will have to fill out now or in the near future is going to be a W-2 form. You’ll have to do this if you have a job that you make at least $600 from in the year. This includes (reported) tips. A W-2 form will be given to you by your employer and should be filled out by April 15th.
A positive part of taxes that everyone loves is the tax return. One of the best pieces of advice for high school students upon receiving their tax return is to save it. A common mentality is that since you already spent the money, you budgeted for it, meaning now it is ‘ok’ to just spend it. But saving this money shows financial responsibility and allows you to be better prepared for future expenses.
Another aspect of taxes that lots of high school students end up having to deal with is in regards to cars. Buying a car is a stressful yet rewarding experience. Some people are lucky enough to be gifted by their parents, others have to purchase one with their own money. Either way, there are some important tips to follow.
If you are being gifted a car, be very careful about putting it under your name. Insurance rates often skyrocket the more liability is put on a younger driver. If you do, make sure you and your parents write “gift” under the transfer line to avoid paying extra taxes that you would have to pay upon a purchase.
If you are buying your first car, the first step is setting a budget. I strongly advise you against taking out a car loan, as you would have to do it under an adult’s name. This means that not only do you have to stress about paying back a loan, you won’t even be able to build your credit score. Instead, try and find a car that you’ll be able to buy full price, afford insurance on, and at least three months of gas with money left over. I also strongly recommend keeping a job during this time just in case unexpected expenses arise, such as repairs.
The reality is you don’t need your dream car as your first car. Finding a reliable, safe, and affordable car is the way to go, especially while you’re still in high school.
