Today's News

Summer Jobs May Carry Tax Consequences

IRS logoYoung people who plan to work this summer need to be aware of the tax consequences of doing so. For instance, an employer is required to withhold federal and state taxes from your check. The amount is determined after you complete a W-4 Employee Withholding Allowance Certificate, which your employer will submit to the IRS. Tip income is also taxable and should be reported to your employer and the IRS. Money earned doing work for others is also taxable. This includes jobs like babysitting and mowing lawns. Keep good records of expenses incurred, like gas for your lawn mower. You may be able to subtract them from the amount of taxes you owe and lower your taxes. Active duty pay for students enrolled in ROTC is taxable, but the subsistence allowance you get while in advanced training is not.

Seasonal employees many not earn enough money to owe income taxes, but employers are still required to withhold Social Security and Medicare taxes. The IRS still recommends filing an income tax return so you can get a refund of the money you paid into the system. Returns can be filed for free through the IRS Free File system. Find more information about the tax consequences of summer jobs online at http://www.irs.gov/Individuals/Students.

 

Click for our Website