Information from IRS.gov
Here are some tips for students with summer jobs:
- Withholding and Estimated Tax. If you are an employee, your employer normally withholds tax from your paychecks. If you are self-employed, you may be responsible for paying taxes directly to the IRS. One way to do that is by making estimated tax payments on set dates during the year. When you get a new job, you need to fill out a Form W-4, Employee’s Withholding Allowance Certificate. Employers use this form to calculate how much federal income tax to withhold from your pay.
- Self-Employment. Money you earn working for others is taxable. Some work you do may count as self-employment, such as: baby-sitting or lawn care. Keep good records of your income and expenses related to your work. You may be able to deduct costs.
- Tip Income. All tip income is taxable. Keep a daily log to report your tips. You must report $20 or more in cash tips received in any single month to your employer and report all of your yearly tips on your tax return.
- Payroll Taxes. You may earn too little from your summer job to owe income tax. But your employer usually must withhold social security and Medicare taxes from your pay. If you’re self-employed, you may have to pay them yourself.
- Newspaper Carriers. Special rules apply to a newspaper carrier or distributor. If you meet certain conditions, you are self-employed. If you do not meet those conditions, and are under age 18, you may be exempt from Social Security and Medicare taxes.
- ROTC Pay. If you’re in ROTC, active duty pay, such as pay you get for summer advanced camp, is taxable.
Give us a call and we can assist you with determining your tax liability.
