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As a kid I used to deliver the local pennysaver to houses in my neighborhood. They didn’t pay much but I’m sure you can imagine my disappointment when I opened my first paycheck and saw how much was taken out in taxes! Since then, I’ve learned a few things about taxes that I’d like to share with students who are looking for their first summer job.

  1. Employers withhold taxes. If your employer says that you’re going to get $10 an hour, don’t expect $100 at the end of 10 hours. Except in a few special circumstances, all employers must withhold Social Security and Medicare taxes from your pay.
  2. As an employee, you will be asked to fill out a Form W-4, Employee’s Withholding Allowance Certificate. Your employer will use the information on this form to figure out how much federal income tax to withhold.
  3. If you get cash tips as part of your job, you must keep a daily log of your tip income, and if it totals $20 or more per month you must report it to your employer. You must also report the yearly total of your tips on your tax return.
  4. Some types of jobs like baby-sitting and lawn mowing may count as self-employment, in which case, make sure you keep track of any expenses related to your work, you might be able to deduct them from your income tax return. Also, keep in mind that because you are self-employed, you will still have to pay Social Security and Medicare taxes.
  5. If you have a newspaper route or otherwise distribute newspapers, special rules apply. Under special conditions you would be considered self-employed, but if you don’t meet these conditions and are under age 18, you might be exempt from paying Social Security and Medicare taxes.

If your summer job is anything like mine was, you might not earn enough to be required to file a tax return. But if your employer withheld any federal or state income tax from your earnings, you will have to file a return to get it refunded to you.

Some of this might seem confusing, but don’t worry. You can prepare and e-file your tax return with ezTaxReturn.com and you’ll be taken step-by-step through the tax preparation process and asked plain English questions to ensure you get the biggest possible return possible.