Babysitting, Mowing and Taxes: When a Teen Side Hustle Gets Complicated
Short answer
Once a teenager’s net earnings from self-employment reach $400 for the year, a tax return is required and self-employment tax is owed at 15.3 percent, which is 12.4 percent for Social Security plus 2.9 percent for Medicare. That $400 is statutory rather than inflation-adjusted, so it is the figure for tax year 2025 and tax year 2026 both, unlike the standard deduction amounts, which move every year. The reason this catches families out is that a side hustle is the mirror image of a W-2 job: nothing is withheld along the way, so nothing comes back at the end, and the return produces a bill rather than a refund. Net means what is left after the real costs of the work, so records kept from the first job onward are worth actual money.
A side hustle is not a small version of a job
A W-2 job and cash work are taxed on two different tracks, and the difference is not one of scale. On a W-2, the employer takes tax out of every check, sends it in, and hands over a form in January. Money has been going in all year, which is why a low-earning teenager’s return often produces a refund.
Self-employment has none of that machinery. Nobody withholds, nobody reports on their behalf, and nothing has been prepaid. When the return is filed, the tax that has been quietly accruing all year arrives all at once, and it is a payment rather than a refund. Same teenager, same amount of money, completely different feeling in April.
That is the thing to say out loud early, ideally before the money is spent.
The $400 rule, and it is the same $400 in tax year 2025 and 2026
IRS Topic 554 sets the line: net earnings from self-employment of $400 or more means a return is required and self-employment tax is owed. The rate is 15.3 percent, made up of 12.4 percent for Social Security and 2.9 percent for Medicare.
Before anything else, the tax year. Most figures on this site change annually and have to be read with a year attached. This one does not: $400 is written into the statute rather than adjusted for inflation, so it is $400 for tax year 2025 returns, filed in 2026, and $400 for tax year 2026 returns, filed in 2027. When you see a standard deduction figure later on this page, that one is year-specific and labelled.
Two things about that number surprise people.
It is low. $400 is a summer of mowing four lawns, or a handful of Saturday nights babysitting. It is not a threshold designed with teenagers in mind and it does not scale down for them.
It stands alone. The filing thresholds for a dependent are much higher for wages, and it is tempting to assume a few hundred dollars is obviously beneath notice. The self-employment trigger is separate and it is met on its own terms. A teenager can be nowhere near the earned income threshold and still be required to file because of this one.
And the part that catches even careful parents: the standard deduction does not save you here. For tax year 2026, a dependent’s standard deduction is the greater of $1,350, or $450 plus earned income, capped at $16,100, per Rev. Proc. 2025-32. That can wipe out federal income tax entirely and still leave self-employment tax owed, because self-employment tax is a different tax. Zero income tax and a self-employment tax bill in the same year is a normal outcome, not an error.
“Net” is doing real work in that sentence
The threshold is net earnings, not everything that came in. Net is what is left after the legitimate costs of doing the work.
For mowing, that is fuel, blades, string, repairs, and the mower itself if they bought it. For dog walking, the leads and the bags. For a reselling operation, what the stock cost. For babysitting, often close to nothing, which is why babysitting crosses $400 sooner than mowing does on the same revenue.
The exact self-employment tax is worked out on Schedule SE, and it is figured on slightly less than the full net amount rather than on all of it, so multiplying net by 15.3 percent gives you a ceiling rather than the precise figure. Use it for planning, not for writing the check.
Babysitting has a wrinkle worth knowing about
Not all babysitting is self-employment. The IRS draws a line based on control: Topic 756 says household workers are the family’s employees if the family controls not only what work is done but how it is done, and it names babysitters as a category that can fall on that side.
There is a specific provision in that topic that matters for teenagers. It says a household employer should not withhold Social Security and Medicare tax for an employee who is under age 18 at any time during the year, unless household work is that employee’s principal occupation, and it states that if the employee is a student, household work is not their principal occupation.
In practice a teenager who sets their own rate, works for several different families, and decides how the evening runs is usually operating as self-employed, and the $400 rule applies. A teenager working set hours for one family who directs the work in detail may be a household employee instead, which puts the obligations on the family rather than on the teenager. It is worth reading Topic 756 before assuming which one you are looking at, because the two answers are genuinely different and neither is unusual.
The records, which take five minutes a week
None of this is hard if the record exists. All of it is miserable if the record is a teenager’s memory in the following March.
A single note in their phone, or a notebook in the kitchen drawer, with one line per job:
| Date | Who | What | Paid | Costs |
|---|---|---|---|---|
| 14 June | Alvarez family, 3 Oak St | Mowing | $35 | $6 fuel |
| 21 June | Bennett family | Babysitting, 4 hours | $60 |
Then keep receipts for anything bought for the work, in one envelope, and photograph them if the ink fades. If money arrives through a payment app, the app’s history is a useful backup but not a substitute, because it will not tell you what anything cost.
The tax reason for all this is the net figure. The other reason is that a teenager who can see what a summer actually earned, after fuel and after tax, has learned something a lecture cannot teach. The teen budget worksheet is built to take that number.
Safety, briefly, because this work is different
This is the one category of teen work with no employer, no manager, and no shift supervisor. A few things worth agreeing before the first job:
An adult knows where they are, whose house it is, the address, and roughly when they will be done. New clients get met in a public place first, with a parent there, before any work at a private address. Jobs that come from an app or an online group get the same treatment as jobs from strangers, because that is what they are. Rate, end time and who is driving them home are agreed before they arrive, not negotiated at eleven at night. And if a situation is off, leaving early is always allowed and never needs to be justified afterwards. If they are finding clients online, scams that target teenagers covers the money side of the same problem.
What this looks like
Sofia is fifteen and spends the summer mowing four regular lawns and babysitting most Friday nights. She takes in a bit over a thousand dollars in cash and app transfers, and spends around a hundred on fuel and a replacement blade.
Her net is around nine hundred dollars, which is over $400, so a return is required and self-employment tax is owed at 15.3 percent. Nothing was withheld from any of it, so there is nothing to refund. The return produces a bill, and the money to pay it has to come from somewhere.
Her father’s practical fix is not a lecture. When she is paid, a share goes straight into a separate account and is not counted as spendable. By the time the return is due, the money for it already exists, which is the entire difference between this being an administrative task and being a crisis.
Sofia’s federal income tax for the year is likely nothing at all, because her income is far below the dependent standard deduction for tax year 2026. The self-employment tax is owed anyway. Those two sentences sit together and both are true.
If they also have a regular job
Many teenagers have both, and the two get combined on one return without merging into one calculation. The wages carry withholding that may come back; the side hustle carries self-employment tax that will not. Which of the three filing triggers applies to your teenager is laid out in does my teenager have to file taxes, and the withholding side is in how to fill out a W-4 for a teenager and why is my teen’s first paycheck so small.
This is general information, not tax advice, and self-employment rules are an area where the details matter. Check the linked IRS pages, or talk to a tax professional, before deciding how to treat a specific year.
Common questions
Nobody sent a 1099. Does the income still count?
Yes. The obligation attaches to the income, not to the paperwork. A form arriving is a reporting step by whoever paid, and its absence does not change what is owed. Assume cash counts and keep the record yourself.
Is it different if they were paid through a payment app?
Not for what is owed. Money for services is income whether it arrived as cash, a check, or a transfer in an app. What an app does or does not report varies and changes, so do not treat the app’s year-end summary as the definition of what counts.
What if they lose money on it?
Then there are no net earnings to tax, and the $400 threshold is not met. Keep the receipts anyway. Being able to show the costs is what makes the net figure defensible rather than a guess.
Can a teenager with only cash income still put money in a Roth IRA?
Self-employment earnings are compensation for this purpose, so yes in principle, and the contribution is capped at what they actually earned. A filed return is the clean record of that amount, which is one of the better reasons to file properly the first year.
Do they owe state tax on it too?
Possibly, and it is a separate system with its own rules and thresholds. Some states have no income tax on this at all. Check your own state’s revenue department rather than assuming the federal answer carries over.