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Students starting summer jobs

Tax information for students

School is already out for the summer at North and South Summit High Schools, while Park City High School students will be out this coming week. Many will be ditching the books and replacing them with time-cards issued by local employers.

Despite the absence from the classroom, learning doesn’t need to go dormant for local working students. Students starting summer jobs have the opportunity to learn real-world lessons that can serve them in the future as well as their diploma.

According to Bill Brunson, Internal Revenue Service media relations in a press release, summer jobs offer students the opportunity to learn about the working world, and taxes.

Here are six things about summer jobs that the IRS wants students to know.

  • As a new employee, student-workers 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 IRS Withholding Calculator tool at IRS.gov to help you fill out the form.
  • If receiving tips is part of the 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 baby-sitting 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. Or, 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, 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.
  • 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.

    For more information about income tax withholding and employment taxes, visit http://www.irs.gov .

    compiled by Cole Fullmer


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