Today’s the first day of Smart Money Week, which, paired with Financial Literacy Month, means exciting things here at NGPF. I need to put last-minute touches on my free webinars for tomorrow (How do I implement an NGPF lesson in my classroom? to register if you haven’t already), but first, my Question of the Day:

How many teens are leaving tax refund money on the table?

This QotD was inspired by @FamZoo’s  twitter response to my question from last week, How many teenagers file tax returns? If you look back there, you see that 1,885,000 folks under 18 filed tax returns in 2011 (the last year of data in an awesome report I found from the Tax Foundation).

So, I started wondering exactly how many teenagers were working during that time. The US Department of Labor has data, but their age groups are not exactly aligned to how it was measured by the the Tax Foundation. In 2011, here’s the chart of data:

Some quick addition and subtraction gives you that 4,327,000 teens between 16 and 19 were employed during 2011. Now, because the two reports use slightly different age ranges, we’re going to have to do some assuming. SUPPOSING that the four ages are equally represented in the Labor Statistics would mean that 2,163,500 of these workers were 16 or 17, which fits with the Tax Foundation’s category of “under 18;” you also have to assume that the Tax Foundation’s “under 18” category included a negligible number of 13, 14, 15-year-olds. Anyway, using those assumptions,

1.885M / 2.1635M = 87% of teens under 18 filed a tax return, and most likely got a refund. That would mean 13% didn’t file and, most likely, left money on the table. FamZoo’s tweet laments that it’s money that could have gone to Roth IRAs.

If I had to guess, I’d assume that more 18 and 19 year-olds are employed than 16 and 17-year-olds, so it’s not a perfect calculation, but it’s a decent enough estimation to satisfy my curiosity. Happy #MoneySmartWeek & #FLM2015.

About the Author

Jessica Endlich

When I started working at Next Gen Personal Finance, it's as though my undergraduate degree in finance, followed by ten years as an educator in an NYC public high school, suddenly all made sense.

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