This summer many students have been working summer jobs. Remember, not
all the money you earn may make it to your pocket. That’s because your
employer must withhold taxes.
Here are some things students should be aware of when they work a summer
job.
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When you first start a new job you must fill out a Form W-4,
Employee’s Withholding Allowance Certificate. This form is used by
employers to determine the amount of tax that will be withheld from
your paycheck. If you have multiple summer jobs, make sure all your
employers are withholding an adequate amount of taxes to cover your
total income tax liability.
*
Whether you are working as a waiter or a camp counselor, you may
receive tips as part of your summer income. All tips you receive are
taxable income and are therefore subject to federal income tax.
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Many students do odd jobs over the summer to make extra cash.
Earnings you receive from self-employment – including jobs like
baby-sitting and lawn mowing – are subject to income tax.
*
If you have net earnings of $400 or more from self-employment, you
will also have to pay self-employment tax. This tax pays for your
benefits under the Social Security system. Social Security and
Medicare benefits are available to individuals who are self-employed
the same as they are to wage earners who have Social Security tax
and Medicare tax withheld from their wages.
