IRS offers summer job tax information for students

PHOENIX – When summer vacation begins, classroom learning ends for most students. Even so, summer doesn’t have to mean a complete break from learning. Students starting summer jobs have the opportunity to learn some important life lessons. Summer jobs offer students the opportunity to learn about the working world – and taxes.

Here are six things about summer jobs that the Internal Revenue Service wants students to know:

  • As a new employee, you’ll need to fill out a Form W-4, Employee’s Withholding Allowance Certificate. Employers use this form to figure how much federal income tax to withhold from workers’ paychecks. It is important to complete your W-4 form correctly so your employer withholds the right amount of taxes. You can use the online IRS Withholding Calculator tool to help you fill out the form.
  • If you’ll receive tips as part of your income, remember that all tips you receive are taxable. Keep a daily log to record your tips. If you receive $20 or more in cash tips in any one month, you must report your tips for that month to your employer.
  • Maybe you’ll earn money doing odd jobs this summer. If so, keep in mind that earnings you receive from self-employment are subject to income tax. Self-employment can include pay you get from jobs like babysitting and lawn mowing.
  • You may not earn enough money from your summer job to owe income tax, but you will probably have to pay Social Security and Medicare taxes. Your employer usually must withhold these taxes from your paycheck. If you’re self-employed, you may have to pay self-employment taxes. Your payment of these taxes contributes to your coverage under the Social Security system.
  • If you’re in ROTC or JROTC, your active duty pay, such as pay received during summer camp, is taxable. However, the food and lodging allowances you receive in advanced training are not.
  • If you’re a newspaper carrier or distributor, special rules apply to your income. Whatever your age, you are treated as self-employed for federal tax purposes if: You are in the business of delivering newspapers, substantially, all your pay for these services directly relates to sales rather than to the number of hours worked, or you work under a written contract that states the employer will not treat you as an employee for federal tax purposes. If you do not meet these conditions and you are under age 18, then you are usually exempt from Social Security and Medicare tax.

Visit the IRS website for more information about income tax withholding and employment taxes.

Resources

Submitted by: Internal Revenue Service

Email: news@stgnews.com

Twitter: @STGnews

Image by Brett Barrett, St. George News
Image by Brett Barrett, St. George News

 

Free News Delivery by Email

Would you like to have the day's news stories delivered right to your inbox every evening? Enter your email below to start!

1 Comment

  • DoubleTap May 31, 2013 at 11:58 am

    Yup…got to get that revenue coming in as soon as possible. Just hope some of those students don’t become journalists or Conservatives.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.