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By Roger Chartier

United States of America IRS Tax Information

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Students are working for the first time and the IRS says...

Students starting a summer job

As far as summer jobs are concerned, not all of the money that a person earns is in the paychecks because their employer has to withhold taxes.

The IRS wants you to be aware of these things before you begin to work for the summer.
Here is what they have to say to us about it:

"1. 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."

"2. 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."

"3. 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."

"4. Even if you do not earn enough money to owe income tax, you will probably have to pay employment taxes. Your employer will withhold these taxes from your paycheck. If you earn $400 or more from self-employment, you will have to pay self-employment tax. This pays for benefits under the Social Security system that are available for self-employed individuals the same as they are for employees that have taxes withheld from their wages. The self-employment tax is figured on Form 1040, Schedule SE, Self-Employment Tax."

"5. Food and lodging allowances paid to ROTC students in advanced training are not taxable. However, active duty pay – such as pay received during summer camp – is taxable."

"6. Special rules apply to services you perform as a newspaper carrier or distributor. You are treated as self-employed for federal tax purposes regardless of your age if you meet the following conditions:

• You are in the business of delivering newspapers.
• All of your pay for these services directly relates to sales rather than to the number of hours worked.
• You perform the delivery services under a written contract which states that you will not be treated as an employee for federal tax purposes.
  If you do not meet these conditions and you are under age 18, then you are generally exempt from Social Security and Medicare tax."

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This is their input about you getting your first job and making sure that you pay your taxes.

Have a nice summer, and do well in school.