Exemption from withholding for first job at 18? Worth it or future trouble?

The exemption from withholding on your W-4 is something you need to be careful with. You can only claim exemption from withholding if you had no tax liability last year AND expect to have no tax liability this year. Just because you've never had a job before doesn't automatically qualify you. What matters is how much you'll earn at this new job. If you'll make less than the standard deduction ($14,600 for 2024, likely higher for 2025), then you probably won't owe taxes. But if you'll earn more than that amount over the year, you'll have a tax liability. Remember that claiming exemption means NO federal income tax will be withheld. If you end up earning enough to owe taxes, you could face a bill next April plus possible underpayment penalties. It's often safer for a first-time worker to have the normal withholding and get a refund rather than risk owing.

I had this exact same issue when I started my first serving job! I found this site https://taxr.ai that helped me understand exactly what to put on my W-4. It basically analyzes your specific situation and tells you what you'll owe. I was also worried about claiming exemption but then found out I'd actually owe some taxes by the end of the year even though I was only working part-time. The site let me put in my expected hours and wage rate, then showed me exactly what would happen if I claimed exemption vs regular withholding. Turns out by claiming exemption I would've ended up owing about $400 at tax time, which I wouldn't have had saved up. Super helpful to see it all broken down instead of guessing.

Just wanted to update that I tried the taxr.ai site that was mentioned here and it was actually super helpful! I put in that I'm making $14.50/hr for about (hopefully) 22 hours a week and it showed me I'd be right at the edge of owing taxes. If I pick up extra shifts during holidays, I'd definitely owe something. I ended up not claiming exemption after seeing the breakdown. The tool suggested I just claim 1 allowance which will take out a small amount each check. Better to get a small refund than owe money I won't have saved! The explanation was way clearer than what my manager told me lol.

If you're tired of trying to figure this out yourself, I'd recommend calling the IRS directly. I had a similar question about exemptions and tried calling them for DAYS but couldn't get through. Then I found this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in less than 20 minutes. I was honestly shocked it worked because I'd spent hours on hold before. They have a demo video here: https://youtu.be/_kiP6q8DX5c that shows how it works. The IRS agent I spoke with walked me through exactly what I should put on my W-4 based on my specific situation. Definitely worth it for the peace of mind knowing I was doing it right from an official source.

Ok I need to eat my words from earlier. I was super skeptical about that Claimyr thing but I was desperate to figure out this same exemption question. I tried calling the IRS three times and kept getting disconnected after 45+ minutes on hold each time. I finally tried the Claimyr service and got connected to an IRS rep in about 15 minutes. The agent explained that in my case (similar to yours - first job, part time) claiming exemption would be risky since I'm expecting to earn just over the standard deduction. She walked me through exactly what to put on my W-4 to have just enough withheld. Never thought I'd actually get clear answers from the IRS but this actually worked!

One thing nobody mentioned - if you're a student, your parents might still be claiming you as a dependent on their taxes. This affects your filing status and potentially whether you should claim exemption. You should definitely check with your parents before making this decision. When I was 18, I filled out my W-4 wrong because I didn't realize my parents were still claiming me. Ended up owing money at tax time AND messed up my parents' return. Super annoying situation that took months to fix.

My first job was at a movie theater when I was 18, and I claimed exemption from withholding cuz I wanted more money in my checks. BIG MISTAKE. I only worked like 25 hrs a week but I also had a small side gig helping a neighbor with yard work who gave me a 1099. The combo pushed me over the limit and I ended up owing like $650 at tax time which I totally didn't have saved. I'd recommend just letting them withhold normally for your first year of work. Then after you see your first tax return, you'll have a better idea if you qualify for exemption next year.

Hey Elijah! I was in almost the exact same situation last year - first job at 18, living at home, parents still supporting me. Here's what I learned the hard way: Since you're living at home and your parents pay for most of your stuff, they're almost definitely going to claim you as a dependent. This actually makes claiming exemption from withholding riskier because your tax situation is a bit different when you're a dependent. I'd strongly recommend NOT claiming the exemption for your first year. I know it's tempting to get that extra money in each paycheck, but here's why it's not worth the risk: 1. You don't know yet how many hours you'll actually end up working - restaurants often offer extra shifts during busy periods 2. Being claimed as a dependent changes your tax calculation 3. You might pick up other income sources throughout the year (tips, side gigs, etc.) 4. If you end up owing money at tax time, you probably won't have it saved since you're just starting out Just let them withhold taxes normally this year. Worst case scenario, you get a nice refund next spring that you can use for college savings. Way better than scrambling to find money you owe to the IRS! After you file your first return, you'll have a much better understanding of your tax situation for next year.

Great question! I went through this same decision when I started my first job at 19. Here's my take based on what I learned: The safe play is definitely to NOT claim exemption from withholding, especially since this is your first year working. Here's why: 1. **You're likely a dependent** - If your parents support you and you live at home, they'll probably claim you as a dependent, which affects your tax calculation 2. **Income can be unpredictable** - Restaurant work often means varying hours, holiday shifts, and potentially tips that could push you over the standard deduction threshold 3. **Better to over-withhold than under-withhold** - Getting a refund is way better than owing money you don't have saved 4. **Learning experience** - Your first tax return will teach you a lot about your actual tax situation, making you better prepared for future years I'd recommend just filling out your W-4 normally (probably claiming 1 allowance) and letting them withhold taxes. Think of it as forced savings that comes back to you as a refund if you don't owe anything. That refund money will be perfect for college expenses! You can always adjust your withholding next year once you understand your tax situation better. The peace of mind is worth more than the extra $20-30 per paycheck you might get from claiming exemption.

As someone who works in tax preparation, I want to echo what others have said - claiming exemption from withholding is rarely a good idea for first-time workers, especially those who might be claimed as dependents. Here's something that hasn't been mentioned yet: even if you end up owing no federal income tax, you'll still owe Social Security and Medicare taxes (FICA) on any income over $400. These taxes are never exempt from withholding, so you'll still see deductions from your paycheck regardless of what you choose for federal income tax withholding. Given that you're 18, living at home, and your parents likely claim you as a dependent, I'd strongly recommend having federal taxes withheld. The standard deduction for someone who can be claimed as a dependent is limited to the greater of $1,150 or your earned income plus $400 (up to the full standard deduction amount). This means even modest earnings could result in tax liability. Restaurant work also means tips, which many young workers forget to properly track and report. If you're earning cash tips that push your total income higher than expected, you could easily find yourself owing taxes. Play it safe this first year - let them withhold taxes normally, and use your first tax return as a learning experience to better understand your situation for future years. The extra money isn't worth the potential stress and penalties of underpayment.

Hey Elijah! I'm actually going through this exact same situation right now - just started my first job at a grocery store and had to figure out the W-4 form too. After reading through all these responses and doing some research myself, I decided NOT to claim exemption from withholding. Here's what really convinced me: even though the extra money each paycheck would be nice, the risk just isn't worth it. Like others mentioned, if your parents are claiming you as a dependent (which they probably are if you're living at home), your tax situation is different and you're more likely to owe something. Plus, I realized that working retail/food service, my hours could really vary throughout the year. What seems like part-time now could turn into way more hours during busy seasons, and suddenly I'd be earning way more than I expected. I'm treating the withholding like automatic savings for college expenses. Even if I get a refund, that's money I can put toward textbooks or other school costs. Way better than potentially scrambling to find money I owe to the IRS when I'm already on a tight budget! Good luck with the new job - the restaurant industry can be great for building work experience and people skills!

Reading through all these responses has been incredibly helpful! As someone who just went through this exact decision process last year, I want to add one more perspective that might help. I was in a similar situation - first job at 18, parents claiming me as a dependent, working part-time at a local business. I initially wanted to claim exemption because that extra money each paycheck seemed really appealing, but my older brother (who works in accounting) gave me some great advice: "Your first year of working and filing taxes is basically a learning experience - don't make it more stressful by trying to optimize for maximum take-home pay." He was totally right. I ended up having normal withholding, and when tax season came around, I got a modest refund of about $400. But more importantly, going through the process of filing my first tax return taught me so much about how taxes actually work, what my real tax liability was, and how all the pieces fit together. Now in my second year of working, I have a much better understanding of my situation and can make more informed decisions about withholding. But that first year? The peace of mind was worth way more than the extra $15-20 per paycheck I would have gotten from claiming exemption. Plus, restaurant work really can be unpredictable with hours and tips. Better to be pleasantly surprised with a refund than stressed about owing money you don't have saved up!

Hey Elijah! I just wanted to chime in as someone who made the opposite choice and learned from it. When I started my first job at 18 (also at a restaurant), I got caught up in wanting that extra money each paycheck and claimed exemption from withholding. Big mistake! Even though I was only working about 25 hours a week, between my regular wages and tips, I ended up earning more than I expected. Plus my parents claimed me as a dependent, which I didn't fully understand at the time. Come tax season, I owed about $300 that I absolutely did not have saved up. The stress of scrambling to find that money was way worse than the small amount extra I got in each paycheck throughout the year. I had to borrow money from my parents, which was embarrassing, and it taught me a hard lesson about being conservative with tax decisions when you're just starting out. Now I always recommend to people in your situation: let them withhold taxes normally for your first year. Think of it as insurance against owing money you don't have. Restaurant income can be really unpredictable with varying shifts and tip amounts, so it's better to be safe. You can always adjust next year once you understand your actual tax situation better!

Hey Elijah! After reading through all these responses, I think you've gotten some really solid advice here. As someone who's helped a lot of young people navigate their first W-4 forms, I want to emphasize what seems to be the consensus: play it safe and don't claim exemption from withholding. The key factors in your situation that make exemption risky: 1. You're likely a dependent on your parents' tax return 2. Restaurant work has unpredictable hours and tip income 3. You don't have experience yet with budgeting for tax obligations 4. The extra money per paycheck isn't worth the potential stress of owing at tax time I'd recommend claiming 1 allowance on your W-4 and letting them withhold federal taxes normally. This will likely result in a small refund next year that you can put toward college savings - think of it as forced savings with a bonus of learning how the tax system works without any financial stress. Your first year of working and filing taxes is really about gaining experience and understanding your situation. Once you've been through a full tax cycle, you'll have much better information to make decisions about withholding in future years. Good luck with the new job - restaurant experience teaches great skills that will serve you well in any career!

Great decision, Emma! You've really absorbed all the excellent advice shared here. As someone who's been through tax season prep with many first-time workers, I can tell you that choosing normal withholding with 1 allowance is absolutely the smart move for your situation. What I love about your approach is that you're treating this as a learning year rather than trying to optimize everything right away. That's exactly the right mindset. The tax system can seem overwhelming at first, but going through it once with some built-in safety (via withholding) will give you the confidence and knowledge to make more informed decisions next year. Restaurant work really is perfect for building life skills, and handling your taxes responsibly right from the start shows great maturity. That potential refund money for college will feel so much better than the stress of owing would have been. Plus, you'll have the satisfaction of knowing you made a well-informed decision based on solid advice from people who've been in your shoes. Best of luck with your new job! The experience you'll gain both from the work itself and managing your first tax situation properly will serve you well for years to come.