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7 Tips for Student and Teenage Taxpayers with Summer Jobs


It is common for students and teenagers to get a summer job to earn extra spending money or additional savings. Here are a few tax tips for taxpayers with a summer job.

1. Withholding and Estimated Tax. Students and teenage employees normally have taxes withheld from their paychecks by their employer, while some workers are considered self-employed and may be responsible for paying taxes directly to the IRS. If you are self-employed, one way to pay your potential tax obligation is by making estimated tax payments during the year.

2. New Employees. When a person gets a new job, their employer will require the employee to fill out a Form W-4, Employee’s Withholding Allowance Certificate. Employers use this form to calculate how much federal income tax to withhold from the employee’s pay.  The IRS has a withholding calculator tool on their website to help taxpayers fill out this form and determine the proper amount to withhold.

3. Self-Employment. A taxpayer may engage in types of work that may be considered self-employment and is potentially subject to both income tax and self-employment tax. Self-employment work includes jobs like baby-sitting or lawn care. Keep good records on money received and expenses paid related to the work, as the net income from these self-employment jobs is what is subject to income tax and potentially self-employment taxes. Self-employment tax will apply to the net income from self-employment once that amount reaches $400.

4. Tip Income. Employees should report tip income by keeping a daily log to accurately report tips. Report tips of $20 or more received in cash in any single month to employer.

5. Payroll Taxes. Taxpayers may earn too little from their summer job to owe income tax, however, employers usually must withhold Social Security and Medicare taxes from their pay. If a taxpayer is self-employed, then Social Security and Medicare taxes may still be due as this is what is known as the self-employment tax and is generally paid by the taxpayer in a timely manner.

6. Newspaper Carriers. Special rules apply to a newspaper carrier or distributor. If one meets certain conditions, then they are self-employed. If the individual does not meet those conditions, and are under the age of 18, they may be exempt from Social Security and Medicare taxes.

7. ROTC Pay. If a taxpayer is in a ROTC program, active duty pay, such as pay for summer advanced camp, is taxable. However, other allowances the taxpayer may receive may not be taxable.

For tax questions in regards to summer jobs or any other tax questions, always consult a Certified Public Accountant.

Submitted by:  Dennis Gallant, Senior Manager, Tax Services, Thomas Howell Ferguson P.A. CPAs, (850) 668-8100.

Thomas Howell Ferguson is a Certified Public Accounting firm (CPA) with offices in Tallahassee and Tampa, FL. We employ over 85 CPAs in both the Tallahassee and Tampa offices. We specialize in audits, taxes, assurance, and business consulting for governmental, not-for-profit, small business, insurance, and SEC clients.