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Tax Tips for Students With Summer Jobs

School’s out and many students now have a summer job. Some students may not realize they have to pay taxes on their summer income.  Below are some important things to remember about income earned while working a summer job.

• All employees fill out a W-4, Employee’s Withholding Allowance Certificate,  when starting a new job. 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, you will need to fill out a new W-4 for each of the different employers.
• Whether you are working as a waiter or a camp counselor, you may receive tips as part of your summer income. All tip income you receive is taxable income and is therefore subject to federal income tax.
• Many students do odd jobs over the summer to make extra cash. Earnings you received from self-employment are subject to income tax. These earnings include income from odd jobs like baby-sitting and lawn mowing.   If you have net earnings of $400 or more from self-employment, you will have to pay self-employment tax.
• Food and lodging allowances paid to ROTC students participating in advanced training are not taxable. However, active duty pay – such as pay received during summer advanced camp – is taxable.
• Special rules apply to services you perform as a newspaper carrier or distributor. You are a direct seller and treated as self-employed for federal tax purposes if you meet the following conditions:
  • You are in the business of delivering newspapers.
  • All 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.
  • Generally, newspaper carriers or distributors under age 18 are not subject to self-employment tax.