Summertime is here and if you’re like most parents or guardians, you’d like for your child to be productive while they’re on summer break and possibly get a summer job, which would help build their work ethic and take some of the financial burden off of you for a few months. As excited as your child may be to make his/her own money, there are a few things that they should be made aware of prior to seeing that chunk of money missing from their first paycheck.
Federal income taxes, social security taxes, and in some states, state & local income taxes, will be withheld from each paycheck to stay in compliance with the IRS.
Tips for Students with Summer Jobs:
WITHHOLDING TAX vs. ESTIMATED TAX PAYMENTS
Keep record of your income and work related expenses (i.e. gas, mileage, tools, etc.) for jobs such as baby-sitting and lawn care. These costs may be able to be deducted, which will reduce the taxes you would have to pay back.
Working in a restaurant this summer? If so, did you know that all tip income is taxable? Employees who receive tips should do the following:
Keep record of your tips daily
Report tips to your employer
Report all tips on your income tax return
Cash tips of $20 or more received in any single month must be reported to your employer.
Before you know it, summer break will be over and school will be back in session. So what about those taxes that were taken out from each check? Your employer will provide you with a Form W-2 (Wage and Tax Statement) by January 31 of the following year.
This document will show you how much you earned overall in wages, tips, and other compensation for that year. You must have this form when filing your tax return. Tax returns for 2018 are due by Tuesday, April 18, and can be filed online using ExpressIRSForms.
If you happen to miss that date or need more time to gather information, file a quick and easy extension with ExpressExtension and automatically get six extra months to file!
If you have any questions regarding the e-filing process give the dedicated ExpressExtension support team a call. We’re available Monday – Friday from 8:30 AM to 5:30 PM EST at 803.514.5155. We also are available via live chat and offer 24/7 email support at firstname.lastname@example.org.
For more tax blogs visit ExpressExtension.com and please share your tips about summer jobs and taxes in the comment section below.