{"id":26798,"date":"2022-05-24T15:44:00","date_gmt":"2022-05-24T19:44:00","guid":{"rendered":"https:\/\/blog.eztaxreturn.com\/?p=26798"},"modified":"2023-06-04T12:58:33","modified_gmt":"2023-06-04T17:58:33","slug":"tax-tips-for-students-with-a-summer-job","status":"publish","type":"post","link":"https:\/\/staging.eztaxreturn.com\/blog\/tax-tips-for-students-with-a-summer-job\/","title":{"rendered":"Tax Tips for Students With a Summer Job"},"content":{"rendered":"\r\n

Getting your first summer job is a rite of passage for many teenagers.\u00a0 It\u2019s your chance to build your resume, get a taste of independence and most importantly, make your own money.\u00a0 But don\u2019t be surprised if your hourly wage doesn\u2019t match your take home pay.\u00a0 Most employers deduct money from your paycheck to pay taxes and there isn’t much you can do about it.\u00a0 Here are a few tax tips for students with a summer job.<\/p>\r\n

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Most new employees must complete a W-4<\/strong><\/h2>\r\n\r\n\r\n\r\n

Before starting a new position, employers typically ask you to complete and submit a Form W-4<\/a>, Employee\u2019s Withholding Certificate.\u00a0 This is how they determine how much taxes to withhold from your pay.\u00a0 Not paying enough during the year may result in you owing money at tax time.\u00a0 On the other hand, if you overpaid, you\u2019ll get a refund when you file your return.\u00a0 Keep in mind, getting a refund<\/a> isn\u2019t as great as people make it out to be because it means you missed your chance to bring home a bigger paycheck throughout the year.<\/p>\r\n

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Some workers must make estimated tax payments<\/strong><\/h2>\r\n\r\n\r\n\r\n

Many students do odd jobs like babysitting, mowing lawns, tutoring and washing cars to make quick cash.\u00a0 In this situation, the IRS<\/a> considers you to be self-employed. Since taxes aren’t withheld from your pay, you\u2019ll need to make quarterly estimated tax payments to the IRS and possibly your state.\u00a0 The payments are due April 15th<\/sup>, June 15th<\/sup>, September 15th<\/sup> and January 15th<\/sup> of the following year.<\/p>\r\n

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Tip income is taxable<\/strong><\/h2>\r\n\r\n\r\n\r\n

If you wait tables or deliver food, tips<\/a> are probably a big part of your earnings.\u00a0 Therefore, it\u2019s important to know that tip income is taxable.\u00a0 Make sure you keep accurate records of how much you receive each day.\u00a0 If you earn more than $20 in cash tips for the month, it must be reported to your employer.<\/p>\r\n

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Expect to pay Social Security and Medicare taxes<\/strong><\/h2>\r\n\r\n\r\n\r\n

The Federal Insurance Contributions Act<\/a> (FICA) requires employers to deduct Social Security<\/a> and Medicare<\/a> taxes from your pay.\u00a0 The money is used to fund both programs which help support retirees, people with disabilities and children.\u00a0 In case you were wondering, 6.2% of your gross wages goes to Social Security tax and 1.45% of your gross wages goes to Medicare taxes.\u00a0 Your employer must also match these percentages.<\/p>\r\n

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Tax filing requirements for students<\/strong><\/h2>\r\n\r\n\r\n\r\n

If you\u2019re still being claimed as a dependent on your parent\u2019s tax return, chances are you won\u2019t be required to file.\u00a0 However, you may want to file anyway, so you can get back the federal taxes that were withheld from your pay.\u00a0 For tax year 2021, most single dependents under age 65 and not blind, must file a return if:<\/p>\r\n\r\n\r\n\r\n

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  1. Your unearned income was more than $1,100<\/li>\r\n\r\n\r\n\r\n
  2. Your earned income was more than $12,550<\/li>\r\n\r\n\r\n\r\n
  3. Your gross income was more than the larger of\r\n