Summer tax reminders for students

Here are the top six tips from the IRS about income earned while working a summer job. Taxpayers fill out a W-4 when starting a new job. Taxpayers with multiple summer jobs will want to make sure all their employers are withholding an adequate amount of taxes to cover their total income tax liability. Whether you are working as a waiter or a camp counselor, you may receive tips. All tip income 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, including odd jobs like baby-sitting and lawn mowing. 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. The self-employment tax is figured on Form 1040, Schedule SE. 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.