Doing Taxes for Your Summer Jobtax tips | June 22, 2017 | By Susannah McQuitty
’Tis the season for cherry limeades, sunburns, and summer jobs (definitely the best time of the year – yeah, I’m looking at you, Christmas), which means it’s also the season for organizing your taxes for those part-time gigs.
And now you’re crying.
Hang with me, folks. The least we can do is make all that adulting stuff a little easier to understand, so here are a few ways to organize your summer job finances.
Knock out that new-hire paperwork
Doesn’t this sound like fun? I mean, it is pretty exciting when you get a new job, but then they toss a bunch of paperwork in your lap and you’re not sure where to start. Let’s simplify this for you: Grab your W-4 first.
Your W-4 is officially called an Employee's Withholding Allowance Certificate. That’s just fancy wording for “Hey, boss, this is how much money I want you to keep out of my paycheck for taxes, so I don’t have to pay them all at once next year.”
A tip on tips
See what we did there? Anybody? Sorry, moving on.
Hate to break it to you, but whoever said that your tips aren’t taxable was pulling your leg. Tips and any income you get in cash are still taxable income because they are in payment for goods and services.
You may not make enough money in tips to owe taxes, but you still have to report that income when you fill out your tax return next year. Keep tabs on how much you’re making, and be sure to set some aside just in case you end up owing taxes.
Being your own boss
Odd jobs are the way to go during the summer. Say it with me: “I want to work my own schedule.” The thing is, just like with tips, you have to pay taxes on the money you make even if you get paid in cash. If you make $400 or more after any work-related expenses, you’ll have to pay self-employment taxes on that income.
Here’s the quick and easy rule: When you’re working a summer job, make sure to keep some of your earnings separate for taxes. You may not end up owing any taxes, but it’s always better to be prepared with some jingle in your pocket.