Most students hold a summer job when they are out of school for the summer. We are going to give you a few tips to avoid tax problems at the end of the year.
- Complete a W-4 when you start a new job. A W-4 is used by employers to determine the amount of taxes that need to be withheld from a paycheck. If a student has multiple summer jobs they’ll want to be sure that each employers is withholding enough taxes to cover their their total income tax liability.
- Tips. If a student is a waiter, camp counselor, or some other common summer job the student may receive tips for their services and as part of their summer income. All tips are considered taxable income and is subject to federal income tax.
- Cash Jobs. Many students pick up odd jobs over the summer and are paid for their hard work in cash. Unfortunately, the earnings are not considered tax free. Examples of jobs may include babysitting and lawn mowing.
Of course these aren’t everything you need to know about your taxes that go along with a summer job. If you have any more questions regarding your summer job and the financials that go with it, feel free to contact us directly or leave a comment in the section below.
