General

Tips for teenage taxpayers starting a summer job 

Now that school’s out, many students will be starting summer jobs…from working at a summer camp to being an office intern. The IRS reminds students that not all the money they earn may make it to their pocket. That’s because employers must withhold taxes from the employee’s paycheck. Here are a few things these workers need to know when starting a summer job:

  • New employees. Students and teenage employees normally have taxes withheld from their paychecks by the employer. When a taxpayer gets a new job, they need to fill out a Form W-4. Employers use this form to calculate how much federal income tax to withhold from the employee’s pay. The Withholding Calculator on IRS.gov can help a taxpayer fill out this form.
  • Self-employment. Students who do odd jobs over the summer to make extra cash – like baby-sitting or lawn care – are considered self-employed. They should remember that money earned from self-employment is taxable. Workers who are self-employed may be responsible for paying taxes directly to the IRS. One way to do that is by making estimated tax payments during the year. Taxpayers who do this should keep good records of all money they receive.
  • Tip income. Someone working as a waiter or a camp counselor who receives tips as part of their summer income should know that tip income is taxable income and subject to federal income tax. They should keep a daily log to accurately report them, as they will report tips of $20 or more received in cash in any single month.
  • Payroll taxes. This tax pays for benefits under the Social Security system. While taxpayers may earn too little from their summer job to owe income tax, employers usually must still withhold Social Security and Medicare taxes from their pay. If a taxpayer is self-employed, then Social Security and Medicare taxes may still be due and are generally paid by the taxpayer.
  • Reserve Officers’ Training Corps pay. If a taxpayer is in an ROTC program, active duty pay, such as pay for summer advanced camp, is taxable. Other allowances the taxpayer may receive – like food and lodging allowances paid to ROTC students participating in advanced training – may not be taxable. The Armed Forces’ Tax Guide on IRS.gov has more details.

More Information:
Tax rules for students.
Is My Tip Income Taxable?
Do I Have Income Subject to Self-Employment Tax?

Taxpayers who usually itemize deductions should check their withholding to avoid tax surprises

WASHINGTON – The Internal Revenue Service encourages taxpayers who typically itemized their deductions on Schedule A of the Form 1040 to use the Withholding Calculator this year to perform a “paycheck checkup.”
People who have itemized before may be affected by changes from the Tax Cuts and Jobs Act. Taxpayers who itemize should use the IRS Withholding Calculator to make sure their employers are withholding the appropriate amount of tax from their paychecks for their financial situation.
The law changes are effective in 2018 and affect the tax returns taxpayers will file in 2019. The new law makes a number of major changes, including:

– Limiting the deductions for state and local taxes
– Limiting the deduction for home mortgage interest in certain cases (see IR-2018-32 for more information)
– Excluding deductions for employee business expenses, tax preparation fees and investment expenses, including investment management fees, safe deposit box fees and investment expenses from pass-through entities

The Tax Cuts and Jobs Act nearly doubled standard deductions and changed several itemized deductions. Some individuals who formerly itemized may now find it more beneficial to take the standard deduction, and this could affect how much a taxpayer needs to have their employer withhold from their pay. Also, even those who continue to itemize deductions should check their withholding because of changes made by the new tax law.
The IRS urges taxpayers to complete their “paycheck checkup” as early as possible so that if a withholding amount adjustment is necessary, there’s more time for withholding to take place evenly throughout the year. Waiting means there are fewer pay periods to make the tax changes – which could have a bigger impact on each paycheck.

Having too little tax withheld could result in an unexpected tax bill or penalty at tax time in 2019. Adjusting withholding after a “paycheck checkup” can also prevent employees from having too much tax withheld. With the average refund topping $2,800, some taxpayers might prefer to have less tax withheld up front and receive more in their paychecks.

Using the Withholding Calculator
When taxpayers use the Withholding Calculator, they can indicate whether they are taking the standard deduction or itemizing their deductions. If they are itemizing, they’ll enter estimates of their deductions. The Withholding Calculator applies the new law to these amounts when figuring the user’s withholding.
It’s helpful if taxpayers have their completed 2017 tax return when using the Withholding Calculator. It can help them estimate the amount of income, deductions, adjustments and credits to enter. They’ll also need their most recent pay stubs. These help the calculator compute the employee’s withholding so far this year.
Calculator results depend on the accuracy of information entered. If a taxpayer’s personal circumstances change during the year, they should return to the calculator to check whether their withholding should be changed.
Employees can use the results from the Withholding Calculator to help determine if they should complete a new Form W-4 and, if so, what information to put on a new Form W-4.
The Withholding Calculator does not request personally-identifiable information, such as name, Social Security number, address or bank account numbers. The IRS does not save or record the information entered on the calculator. As always, taxpayers should watch out for tax scams, especially via email or phone and be alert to cybercriminals impersonating the IRS. The IRS does not send emails related to the Withholding Calculator or the information entered.
Adjusting withholding
Employees who need to complete a new Form W-4 should submit it to their employers as soon as possible. Employees with a change in personal circumstances that reduce the number of withholding allowances must submit a new Form W-4 with corrected withholding allowances to their employer within 10 days of the change.
As a general rule, the fewer withholding allowances an employee enters on the Form W-4, the higher their tax withholding will be. Entering “0” or “1” on line 5 of the W-4 means more tax will be withheld. Entering a bigger number means less tax withholding, resulting in a smaller tax refund or potentially a tax bill or penalty.

Apr 24, 2018 – IRS Funding Information

The IRS releases refunds each weekday throughout the year. We provide the percentage of refunds that have not yet been funded by the IRS. We update these funding statistics at approximately 2:00pm eastern each weekday throughout the year.

As of today, the estimated percentage of refunds not yet released by the IRS are:

– for returns filed 02/22 and prior, most refunds have been released by the IRS.

– for returns filed 02/23 – 03/24, approximately 10% have not yet been released by the IRS.

– for returns filed 03/25 – 03/31, approximately 15% have not yet been released by the IRS.

– for returns filed 04/01 – 04/08, approximately 20% have not yet been released by the IRS.

– for returns filed 04/09 – 04/10, approximately 25% have not yet been released by the IRS.

– for returns filed 04/11 – 04/11, approximately 50% have not yet been released by the IRS.

– for returns filed 04/12 – 04/14, approximately 55% have not yet been released by the IRS.

– for returns filed 04/15 – 04/16, approximately 60% have not yet been released by the IRS.

– for returns filed 04/17 – 04/17, approximately 85% have not yet been released by the IRS.

– for returns filed 04/18 and beyond, the IRS has released very few refunds.

Apr 23, 2018 – IRS Funding Information

The IRS releases refunds each weekday throughout the year.
We provide the percentage of refunds that have not yet been funded by the IRS. We update these funding statistics at approximately 2:00pm eastern each weekday throughout the year.

As of today, the estimated percentage of refunds not yet released by the IRS are:

– for returns filed 02/21 and prior, most refunds have been released by the IRS.

– for returns filed 02/22 – 03/23, approximately 10% have not yet been released by the IRS.

– for returns filed 03/24 – 03/27, approximately 15% have not yet been released by the IRS.

– for returns filed 03/28 – 04/03, approximately 20% have not yet been released by the IRS.

– for returns filed 04/04 – 04/04, approximately 30% have not yet been released by the IRS.

– for returns filed 04/05 – 04/08, approximately 35% have not yet been released by the IRS.

– for returns filed 04/09 – 04/09, approximately 40% have not yet been released by the IRS.

– for returns filed 04/10 – 04/10, approximately 50% have not yet been released by the IRS.

– for returns filed 04/11 – 04/12, approximately 75% have not yet been released by the IRS.

– for returns filed 04/13 – 04/16, approximately 80% have not yet been released by the IRS.

– for returns filed 04/17 and beyond, the IRS has released very few refunds.

Apr 11, 2018 – IRS Funding Information

The IRS releases refunds each weekday throughout the year. we provide the percentage of refunds that have not yet been funded by the IRS. We update these funding statistics at approximately 2:00pm eastern each weekday throughout the year.

As of today, the estimated percentage of refunds not yet released by the IRS are:

– for returns filed 02/13 and prior, most refunds have been released by the IRS.

– for returns filed 02/14 – 03/11, approximately 10% have not yet been released by the IRS.

– for returns filed 03/12 – 03/19, approximately 15% have not yet been released by the IRS.

– for returns filed 03/20 – 03/27, approximately 20% have not yet been released by the IRS.

– for returns filed 03/28 – 03/28, approximately 30% have not yet been released by the IRS.

– for returns filed 03/29 – 03/30, approximately 45% have not yet been released by the IRS.

– for returns filed 03/31 – 04/03, approximately 50% have not yet been released by the IRS.

– for returns filed 04/04 – 04/04, approximately 70% have not yet been released by the IRS.

– for returns filed 04/05 – 04/05, approximately 95% have not yet been released by the IRS.

– for returns filed 04/06 and beyond, the IRS has released very few refunds.

Apr 10, 2018 – IRS Funding Information

The IRS releases refunds each weekday throughout the year. we provide the percentage of refunds that have not yet been funded by the IRS. We update these funding statistics at approximately 2:00pm eastern each weekday throughout the year.

As of today, the estimated percentage of refunds not yet released by the IRS are:

– for returns filed 02/13 and prior, most refunds have been released by the IRS.

– for returns filed 02/14 – 03/10, approximately 10% have not yet been released by the IRS.

– for returns filed 03/11 – 03/19, approximately 15% have not yet been released by the IRS.

– for returns filed 03/20 – 03/27, approximately 20% have not yet been released by the IRS.

– for returns filed 03/28 – 03/28, approximately 45% have not yet been released by the IRS.

– for returns filed 03/29 – 04/03, approximately 50% have not yet been released by the IRS.

– for returns filed 04/04 – 04/04, approximately 95% have not yet been released by the IRS.

– for returns filed 04/05 and beyond, the IRS has released very few refunds.

Mar 26, 2018 – IRS Funding Information

The IRS releases refunds each weekday throughout the year. We provide the percentage of refunds that have not yet been funded by the IRS. We update these funding statistics at approximately 2:00pm eastern each weekday throughout the year.

As of today, the estimated percentage of refunds not yet released by the IRS are:

– for returns filed 01/24 and prior, most refunds have been released by the IRS.

– for returns filed 01/25 – 02/23, approximately 10% have not yet been released by the IRS.

– for returns filed 02/24 – 03/06, approximately 15% have not yet been released by the IRS.

– for returns filed 03/07 – 03/07, approximately 25% have not yet been released by the IRS.

– for returns filed 03/08 – 03/12, approximately 30% have not yet been released by the IRS.

– for returns filed 03/13 – 03/13, approximately 40% have not yet been released by the IRS.

– for returns filed 03/14 – 03/18, approximately 70% have not yet been released by the IRS.

– for returns filed 03/19 – 03/19, approximately 75% have not yet been released by the IRS.

– for returns filed 03/20 and beyond, the IRS has released very few refunds.

    Mar 23, 2018 – IRS Funding Information

The IRS releases refunds each weekday throughout the year. We provide the percentage of refunds that have not yet been funded by the IRS. We update these funding statistics at approximately 2:00pm eastern each weekday throughout the year.

As of today, the estimated percentage of refunds not yet released by the IRS are:

– for returns filed 01/21 and prior, most refunds have been released by the IRS.

– for returns filed 01/22 – 02/20, approximately 10% have not yet been released by the IRS.

– for returns filed 02/21 – 03/06, approximately 15% have not yet been released by the IRS.

– for returns filed 03/07 – 03/07, approximately 25% have not yet been released by the IRS.

– for returns filed 03/08 – 03/11, approximately 30% have not yet been released by the IRS.

– for returns filed 03/12 – 03/13, approximately 40% have not yet been released by the IRS.

– for returns filed 03/14 – 03/18, approximately 70% have not yet been released by the IRS.

– for returns filed 03/19 and beyond, the IRS has released very few refunds.

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NATP

National Association of Tax Professionals