Summer job season is here
Students getting out of school and taking a summer job have an added opportunity to keep learning . . . about the tax system.The IRS reminds students:
- Fill out a W4 so your employer knows how much tax to withhold. If you work multiple small jobs, each may pay under the withholding threshold and a chance exists that no tax will be withheld for you. Use the W4 to ensure employers are withholding an adequate amount to avoid an unpleasant surprise when you file your tax return next year.
- If you receive tips, be sure to declare them – this income is subject to income tax.
- If you work odd jobs, such as babysitting or yard work, you’re self-employed and your income is subject to income tax. (Patrick & Robinson CPAs applauds your entrepreneurial spirit though!)
- Even if you don’t earn enough during the year to owe income tax, you’ll likely need to pay FICA. If you’re self-employed and earn more than $400 you’ll be subject to self-employment tax – Social Security’s equivalent to FICA for independent contractors.
- Are you enrolled in ROTC and receiving pay? “Active duty” pay – such as pay you receive during summer training – is taxable. Food and lodging allowances, though, are not.
- If you deliver newspapers, special rules apply. If you’re under age 18 and don’tmeet the following conditions, then you won’t owe Social Security and Medicare tax:
- Your business is delivering newspapers
- You receive pay related to the sale of the papers rather than the number of hours you work
- You sign a written contract stating that you’ll not be treated as an employee for federal tax purposes
Unless you’re a budding Mark Zuckerberg, you probably don’t need the services of a CPA just yet . . . but keep pushing towards your dreams and Patrick & Robinson CPAs will be available when you need us. Meanwhile, browse our financial tools for other tips and information. We look forward to hearing from you! Reach us at Office@CPAsite.com or 904-396-5400. You can also find us on Facebook and Twitter.
