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Summer tax tips for teens with jobs

Posted on June 11, 2019

Teens with summer jobs are doing more than earning a little income, they may also be saving for college, learning responsibility, and – just as importantly — acquiring an understanding of how our income tax structure works.

Towards that end, the CPAs at Teipen Selanders Poynter & Ayres have come up with some key information about summer jobs, teens and taxes we hope you will share with your students.

Here’s what your working teen should know:



  • All employees – including teens and students – must have taxes withheld from their paychecks by their employer.
  • When your teen gets hired, s/he should fill out Form W-4, Employee’s Withholding Allowance Certificate. Employers use this form to calculate how much federal income tax to withhold from the new employee’s pay.
  • How does one know how much to withhold for taxes? The IRS makes this easy. The Withholding Calculator on gov can provide your teen with the information needed to fill out this form.
  • Some students are self-employed, doing jobs like mowing lawns, walking dogs or cutting lawns. Money earned from self-employment is still taxable, and self-employed workers may be responsible for paying taxes directly to the IRS.
  • How much do self-employed students pay to the IRS? The IRS recommends making estimated tax payments during the year.
  • What about students working as waiters and relying on tips? Tip income is absolutely taxable. Students are encouraged to keep a daily log to accurately report tips, reporting cash tips to their employer for any month that totals $20 or more.

Understanding how payroll taxes work:

This tax pays for benefits under the Social Security system. Even though students will not need to depend on social security income for decades, employers must still withhold Social Security and Medicare taxes from their pay.

If a student is self-employed, Social Security and Medicare taxes may still be due and are generally paid by the student.

Reserve Officers’ Training Corps pay: If a student is in an ROTC program, and receives pay for activities such as summer advanced camp, that income is taxable. However, other ROTC allowances, such as food and lodging, may not be taxable. The Armed Forces’ Tax Guide on IRS.gov provides specifics.

The IRS has lots more information on line, and it is written in a way your student will probably be able to understand. Go to IRS.gov and search for:

Tax rules for studentsIs My Tip Income Taxable?

Do I Have Income Subject to Self-Employment Tax?

That said, many of us at TSPA have or have had students with summer jobs. If your student has specific questions you aren’t sure how to answer, we would be happy to talk to them.