June 1, 2013
Many students hold a summer job during their time off from school. Here are some tax issues that should be considered when working a summer job.
3. Cash Jobs – Many students do odd jobs over the summer and are paid in cash. Just because the job is paid in cash does not mean that it is tax-free. Unfortunately, the income is taxable and may be subject to self-employment taxes (see below). These earnings include income from odd jobs like babysitting and lawn mowing.
4. Self-Employment Tax – When an individual works for an employer, the employer withholds FICA (Social Security taxes) and Medicare taxes from the employee’s pay, matches the amount dollar for dollar, and remits the combined amount to the government. Self-employed workers are required to pay the combined employee and employer amounts themselves (referred to as self-employment tax) if their net earnings are $400 or more. This tax pays for their benefits under the Social Security system. Even if a worker is not liable for income tax, this 15.3% tax may apply.
5. ROTC Students – Subsistence 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.
6. Newspaper Carrier or Distributor – Special rules apply to services performed as a newspaper carrier or distributor. An individual is a direct seller and treated as self-employed for federal tax purposes under the following conditions:
7. Newspaper Carriers or Distributors Under Age 18 – Generally, newspaper carriers or distributors under age 18 are not subject to self-employment tax.
Please call this office if you have additional questions.
June is national safety month, and it never hurts to remind your clients and community that safety always comes first. Our goal with this blog is to help you augment your marketing initiatives with a few ideas around safety. While we can’t cover every industry in a single post, we hope that you find the tips below useful and that they spark some innovative new marketing ideas!
It’s graduation season, and for many parents that means it’s almost time to start shelling out for college tuition. For those well-prepared parents with established 529 plans in place, the time has come to tap into that money pool. Of course, when it comes to tax-advantaged savings, trust that the IRS is keeping close watch, so it’s important to avoid making any rookie mistakes. It’s also important to keep saving as you move forward.
Having a remote workforce can be challenging, especially if you are trying to build a positive, collaborative work environment. So, how do you create a sense of comradery when you have staff in remote locations? These tips can help: