Tips from the IRS regarding what students should know about their summer job and taxes.
- Withholding and Estimated Tax. Your employer will withhold tax from your paychecks. If you are self-employed, you may have to pay estimated tax to the IRS on set dates during the year.
- New Employees. When you get a new job, you will need to fill out a Form W-4. Employers use it to figure how much federal income tax to withhold from your pay.
- Self-Employment. Money you earn doing work for others is taxable. These can be jobs like baby-sitting or lawn care. Keep good records of your income and expenses related to your work.
- Tip Income. All tip income is taxable. Keep a daily log to report them. You must report $20 or more in cash tips in any one month to your employer.
- 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.
