Before you put up that sunscreen and pack those backpacks for school, there's one more summer task yet to be done. If your teenager had a summer job, the IRS wants you to know you may need to pay Uncle Sam.
- Double check to make sure the employer withheld the correct amount from your teen's paycheck. You can use the Withholding Calculator on IRS.gov.
- Any tip income your teen received is taxable income and subject to federal income tax.
- Many students do odd jobs over the summer to make extra cash. Earnings received from self-employment are subject to income tax. These earnings include income from odd jobs like baby-sitting and lawn mowing.
- If your teen made net earnings of $400 or more from self-employment, he or she will also have to pay self-employment tax. The self-employment tax is figured on Form 1040, Schedule SE.
- 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.
- While special rules apply to services you perform as a newspaper carrier or distributor, generally speaking, newspaper carriers or distributors under age 18 are not subject to self-employment tax.