If you’re a student working a summer job between semesters, remember one important detail: Any money you make is most likely subject to taxes, meaning you might not be making as much as you think.
Depending on where you work, there are several different ways in which you might need to file your taxes, so be sure to do your homework at the Internal Revenue Service (IRS) website.
How to Stay Audit-Free
No matter how little or much you earn at your summer job, you’ll need to pay taxes. The key is doing it correctly and thoroughly.
If you are an official member of your workplace’s staff, the company will probably put you on payroll and have you fill out a W-4 form. The W-4 is the official documentation of how much money will be subtracted from each of your paychecks for taxes.
If you work in a less-structured environment (lawn-mowing or odd jobs), you still need to report all of your earnings for income tax and self-employment tax. You will need to add any tips you make at a restaurant or other service-based job to your taxable income total as well. The self-employment form is referred to as a “1040.”
There may be some exceptions to these rules depending on where you work. Be sure to inquire at your workplace, consult a tax professional or visit IRS.gov to make sure you comply with tax laws.