As you build a team to support your small business in its busy season, share this blog with your new hires to help them gain a better understanding of seasonal employment.
Summer is right around the corner which means jobs hiring in your area are seeking individuals looking for employment. Even students are enjoying their first week of summer break or are anxiously awaiting their freedom from early morning bus rides, class schedules, and not-so-tasty cafeteria lunches so they can begin looking for teen jobs. Many will be starting summer jobs to make some extra change and will come to the realization that not all of the money they earn will make it into their pockets.
Today, we will cover four things you need to know about seasonal employment.
4 Things You Need To Know About Seasonal Employment
1) Self-Employment & Entrepreneurship
We live in a “stack your coins” (make your money) society that strongly encourages entrepreneurship. If you are not the nine-to-five type of worker and prefer self-employment opportunities such as babysitting, lawn care, catering, etc., you must know that money earned from self-employment is taxable.
Depending on how much money you make, you may be responsible for paying taxes directly to the IRS. This can be done throughout the year with what is called estimated tax payments. If you are required to do this you should keep good records of all money that you receive.
2) Starting as a New Employee
When starting a new job at a business, you will be required to fill out a Form W-4. Employers use this form to calculate the amount of federal income tax that must be withheld from your pay as an employee.
The IRS Withholding Calculator can assist you with filling out this form if you have any questions.
3) Tip Income
If you pick up a job that allows you to receive tips as part of your income, you should we aware that tip income is taxable and subject to federal income tax.
Tip: Keep a daily log of how many tips you receive because employers will need to report tips of $20 or more that are received in cash in any single month.
4) Payroll Taxes
Taxes, taxes, taxes…seems like we just can’t get away from them. Payroll taxes are used to pay for benefits under the Social Security system. Although some taxpayers may earn too little from their summer job employment to owe income tax to the IRS, employers typically still withhold Social Security and Medicare taxes from their employee’s pay.
As you look for jobs hiring to make some extra cash this summer, be sure to Get The 411 on Summer Jobs & Taxes so you aren’t blind-sided when you open your first paycheck. Keep those paystubs, receipts, and tip income records because you will need them when it’s time to file your annual income tax return in April 2019.
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