Tax Tips for Students Working this Summer

Tax Tips for Students Working this Summer

Many students get summer jobs. It’s a great way to earn extra spending money or to save for later. Here are some tips for students with summer jobs:

1. Withholding and Estimated Tax. If you are an employee, your employer normally withholds tax from your paychecks. If you are self-employed, you may be responsible for paying taxes directly to the IRS. One way to do that is by making estimated tax payments on set dates during the year. This is essentially how our pay-as-you-go tax system works.

2. New Employees. When you get a new job, you need to fill out a Form W-4, Employee’s Withholding Allowance Certificate. Employers use this form to calculate how much federal income tax to withhold from your pay. The IRS Withholding Calculator tool on IRS.gov can help you fill out the form.

3. Self-Employment. Money you earn working for others is taxable. Some work you do may count as self-employment. These can be jobs like baby-sitting or lawn care. Keep good records of your income and expenses related to your work. You may be able to deduct those costs. A tax deduction generally reduces the taxes you pay.

4. Tip Income. All tip income is taxable. Keep a daily log to report your tips. You must report $20 or more in cash tips received in any single month to your employer. And you must report all of your yearly tips on your tax return.

5. Payroll Taxes. You may earn too little from your summer job to owe income tax. But your employer usually must withhold social security and Medicare taxes from your pay. If you’re self-employed, you may have to pay them yourself. They count for your coverage under the Social Security system.

6. Newspaper Carriers. Special rules apply to a newspaper carrier or distributor. If you meet certain conditions, you are self-employed. If you do not meet those conditions, and are under age 18, you may be exempt from Social Security and Medicare taxes.

7. ROTC Pay. If you’re in ROTC, active duty pay, such as pay you get for summer advanced camp, is taxable. Other allowances you may receive may not be taxable, seePublication 3 for details.

8. Use IRS Free File. You can prepare and e-file your tax return for free using IRS Free File, available only on IRS.gov. You may not earn enough money to be required to file a federal tax return. Even if that is true, you may still want to file. For example, if your employer withheld income tax from your pay, you will have to file a return to get a tax refund.

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Orlando Scams to be on the lookout for!

Beware- Orlando-Related Scams: IRSinShare

The IRS has issued a consumer alert about possible fake charity scams in the wake of last weekend’s mass shooting in Orlando, Fla.

Scam artists commonly try to take advantage of generosity after such a headline tragedy by impersonating charities to get money or private information from taxpayers, the agency warns. Such fraudulent schemes may involve contact by telephone, social media, e-mail or in-person solicitations.

The IRS cautions donors to follow these tips:

• Donate to recognized charities and beware of charities with names similar to familiar or nationally known organizations. Some phony charities use names or Web sites that sound or look like those of respected, legitimate organizations. The IRS Exempt Organizations Select Check feature, helps find qualified charities. Donations to these charities may also be tax-deductible.
• Don’t give out personal financial information such as Social Security numbers or credit card and bank account numbers and passwords to anyone who solicits a contribution.
• Don’t give or send cash. For security and tax record purposes, contribute by check or credit card or another way that provides documentation of the gift.
• Bogus Web sites may solicit funds for victims of this tragedy, frequently mimicking the sites of legitimate charities or claiming to be affiliated with legitimate charities.
• Scammers often send e-mails that steer recipients to bogus sites that appear to be affiliated with legitimate charitable causes.