If you are a student the summer is a great time to earn a little extra cash and get a job. You have more free time being off from school and having a summer job can teach you about responsibility and give you some real world working experience. Having a summer job also means you will have to pay taxes like every other working person. The taxes you pay help your local community as well as your state and federal government. If you are a student working during the summer you should know the basics about taxes.
Taxes from working your summer job will be withheld from your paycheck by your employer. Your employer withholding taxes from your pay check is the easiest way to go. Some workers who are self-employed pay an estimated tax amount to the IRS on designated pay dates. The US tax system is set up as a pay as you go system, meaning you pay taxes as you earn money.
If you are a new employee to a job you will be required to fill out Form W-4, Employee’s Withholding Allowance Certificate. This will help your employer determine how much tax needs to be withheld from each paycheck.
If you work a job where you earn tips you are required to report all tip earnings as they are subject to taxes. The easiest way to keep track is to keep a daily log of how much you received in tips for that day, so you can report them where needed. If you receive more than $20 a month in taxes you should report it to your employer, and you will have to report all tip earnings at the end of the year on your tax return.
Depending on how much you make there is a chance you will not earn enough money to pay taxes on. Even if you do not have to pay federal, state or local taxes you are still required to pay social security and Medicare taxes. These programs will help keep you covered later in life under the social security system. If you earn money being self-employed you are required to pay both of these taxes on your own.
If you are a newspaper carrier you fall under special tax regulations. For some carriers under certain conditions can be considered self-employed. If you do not meet the conditions and are under 18 years old you usually will not have to pay the social security and Medicare taxes.
If you do not earn enough money from your summer job you may not be required to file a yearly tax return. It is still always a good idea to file anyway, as if you happen to have overpaid you will get a refund.