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  • Writer's pictureJames D. Lynch

Tax Tips For Summer Job

Now that school is out, many students will be starting summer jobs. Here are some things students should keep in mind about taxes.

Not all the money you earn will make it to your pocket. Your employer is required to withhold various taxes from your paycheck. Employers must withhold Social Security and Medicare taxes (also known as FICA taxes), and this will amount to 7.65% of your gross income. Employers also withhold federal income taxes (as well as state income taxes if you are in a state that has a state income tax), but you may not earn enough from your summer job to owe income tax. As a new employee, your employer will have you fill out a Form W-4. Employers use this form to calculate how much income tax to withhold from your pay.

If you receive tips as part of you summer income, keep in mind that tip income is taxable income. The IRS requires tipped employees to report tips of $20 or more received in cash in any single month.

Students who do odd jobs over the summer to make extra cash, such as baby-sitting or lawn mowing, are considered self-employed. (Always remember that money you earn doing work for others is taxable.) The IRS requires you to file a tax return if your net earnings from self-employment are $400 or more for the year. Keep good records of expenses related to your self-employment work, because you may be able to deduct (subtract) those costs from your income on your tax return.

If you are in an ROTC program, active duty pay, such as pay for summer advanced camp, is taxable. Other allowances the taxpayer may receive – such as food and lodging allowances paid to ROTC students participating in advanced training – is not taxable.

You may not earn enough money from your summer job to be required to file a tax return. Even so, you may still want to file a 2018 tax return. For example, if your employer withheld income tax from your pay, you will have to file a return to get your taxes refunded.


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