STATEWIDE — Summer vacation is here for most high schoolers. That means many students will be using their time off from school to work a summer job.
Some students are entering the work force for the first time, which means they will be getting a crash course on how to do taxes. The Indiana Dept. of Revenue is offering a few pointers for first time workers.
“What we really want people to know when they are entering a summer job is that you almost always want taxes to be taken out of that,” said department spokeswoman Michelle Cain. “If you don’t, then you could end up owing once tax time comes around.”
Cain said a good place to start is to get familiar with what forms you will be filling out once you are hired for a summer job.
“There is a federal form, which is a W-4, and a state form which is a WH-4,” said Cain. “Those are both for withholding taxes.”
To help taxpayers accurately complete the federal form, the IRS has an online Withholding Calculator.
Jobs such as babysitting or lawn mowing are classified as self-employment.
“Income earned from self-employment is subject to income tax,” Cain continued. “Workers who are self-employed may be responsible for reporting and paying taxes directly to DOR and the IRS.”
She stressed that if you do not report this income to the DOR or IRS you could end up owing both entities when tax time comes around.
In addition, employees who receive tips as part of their summer income need to report those tips when filing taxes. Tip income is taxable and any amount over $20 in a month needs to be reported to an employer. Keeping a daily tip record will help come tax time.
Cain also reccommended that your son or daughter get familiar with the several way to file taxes. Dependents should be able to file for free online using services such as Turbo Tax or H&R Block.
(PHOTO: Joe Raedle/Getty Images)
