Tax Tips for Students with Summer Jobs

Most students will often try to get a job during summer time to earn some extra money for their personal spending.  If it’s your first job in this summer, it will give you a chance to get some work experience and also to pay some taxes to your government. The taxes that you pay will support your home town, your state and also your country. Here are some tips that you should know about summer jobs and taxes:

• Withholding and Estimated Tax.  If you are an employee, your employer will withhold tax from your paychecks. If you are a self-employed, you will have to pay estimated tax directly to both the federal and state governments on set dates during the year 

• New Employees.  When you get a new job, you will need to fill out a Form W-4, Employee’s Withholding Allowance Certificate.  Employers will use this form to figure out how much income tax to withhold from your paycheck.  

• Self-Employment.  Money you earn from doing work for others is taxable. Some work you do may count as self-employment. These can be jobs like baby-sitting or lawn care for your neighbors.  You need to keep good records of your income and expenses that are related to your work. You may be able to deduct (subtract) those costs from your income on your tax return. A deduction can often lower your taxes and increase your refund.

• Tip Income.  All tip incomes are taxable. You should try to keep a daily log to report them.  If you make $20 or more in cash tips in any one month, you must report it to your employer.  You must also report all of your yearly tips on your tax return.
• Payroll Taxes.  Your income from summer job sometimes may be too little for you to owe any income tax. But your employer usually must withhold social security and Medicare taxes from your paycheck. If you’re a self-employed person, you may have to pay both the social security and Medicare taxes yourself. They count for your coverage under the Social Security system.

• File Your Tax Return.  You may not earn enough money from your summer job to be required to file your tax return. Even if that is the case, you may still want to file. For example, if your employer withheld income tax from your paycheck, you will have to file your tax return to get your withholding back.

If you have any questions, please feel free to email us.

Your comments and feedbacks are welcome.
Source:  www.irs.gov.
Email:   Excellent-tax@gmx.com