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Category: General Questions

Tax Information for Students with Summer Jobs (or any job)

When summer vacation begins, many students will work summer jobs to help pass the time as they wait for the Fall semester of college to begin. Many reasons students work over the summer is to help with summer expenses such as movies with friends, weekend trips to the beach, and sporting events just to name a few. Summer jobs are also a great way to learn about the working world and to pick up on some tax knowledge.


Here are six items about summer jobs that the IRS would want you to know:

1. As a new employee, you will need to fill out a W-4, Employee's Withholdings Allowance Certificate. Your employer will use this form to determine how much federal income tax to withhold from each of your paychecks. It is very 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 to help you fill out your W-4 form.


2. If you will receive tips as part of your income (i.e. waiting tables), remember that all tips you receive are taxable. Be sure to 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. Note: Generally, at the end of each shift, your employer will require that you report your tips earned.


3. You may perform odd jobs during the summer such as baby-sitting or lawn mowing. If so, keep in mind that earnings you receive from self-employment are subject to income tax.


4. 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 each of your paychecks. If you are self-employed (refer to Bullet 3), you may have to pay self-employment taxes. Your payment of these taxes contributes to your coverage under the Social Security system.


5. If you are in ROTC (Reserve Officers' Training Corps), 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.


6. If you are a newspaper carrier or distributor, special rules apply to your income. No matter your age, you are treated as self-employed for federal tax purposes if:

    a. You are in the business of delivering newspapers.

    b. Substantially all your pay for these services directly relates to sales rather than to the number of hours worked.

    c. You work under a written contract that states the employer will not treat you as an employee for federal tax purposes.


Note: For Item 6, if you do not meet these conditions and you are under age 18, then you are usually exempt from Social Security and Medicare tax.