Is your child thinking about taking on a job for extra money this summer? If so, both of you may have questions about taxes. The following are a few tax tips to help you prepare.
For 2017, your child can earn as much as $6,350 and not pay federal income tax. If your child’s earnings won’t exceed this amount, consider having the child claim “student-exempt” when completing the “Federal Withholding Allowance Certificate” (Form W-4). As long as your child’s total income doesn’t exceed the $6,350 limit, he or she may not need to file a 2017 federal tax return.
Don’t overlook the fact Social Security and Medicare taxes will be withheld from your child’s paycheck. While these payments are not income taxes, let your new worker know they will be withheld from his or her paycheck.
Keep in mind that self-employment income, tips, interest, dividends, and stock sales may impact your child’s tax return filing requirement.
According to the IRS: “To meet the qualifying child test, your child must be younger than you and either younger than 19 years old or be a “student” younger than 24 years old as of the end of the calendar year.”
If you need more details about the tax implications of your child’s summer job, please call us (215) 706-0800.
out the tax implications of your child’s summer job, please call us (215) 706-0800.