July 5, 2016
Let’s talk for a moment about the future of this Nation, and no, I am not inviting an open exchange of political or parenting views, but merely reflecting on one way to encourage building work ethic in our young citizens. It is commonly said that the children are our future; well what are we doing to help develop and inform the minds and consciences of our young people? After all, it was people looking for the freedom to live in a way that allowed them to be true to themselves and their beliefs that founded this great Nation. If it was their beliefs and moral compasses that guided them to form this nation, it was the incredible resilience, resourcefulness and work ethic that drove the success of the nation. 240 years later, we are still benefiting from what our forefathers did before us.
How do we capture that spirit of hard work and delayed gratification and preserve it for, and inspire the generations to come.
May St. Louis college students are coming home from school for the summer, and many high school students have the summer off before they dive into another school year. How many of these students will have summer jobs in St. Louis that they use to fund their summer escapades? Believe it or not, having the right summer job or internship can be the spark that ignites a passion in a young person, resulting in them developing a strong work ethic without even realizing it.
These summer jobs and internships can come in all shapes, sizes, and colors. Some jobs that will inspire one student to greatness, will deflate the sails of another. There is a delicate balance in finding a job that inspires and finding a job that will teach a student something. Summer jobs can be resume or skill building, or just teach a student the value of money and the joy of working and saving for something that they want. It is that same spirit of hard work, determination, and tenacity that built this country.
The biggest drawback to having a summer job is that it does create a little more work at tax time. For that reason, remember! …….our focus on Tuesday is Taxes so lets talk about some situations that a summer worker may encounter!
Regular W-2 Job: If the student worker is working in a traditional job, meaning they have filled out a W-4 form and submitted it to their employer, their withholding taxes are typically being withheld by their employer. When tax time comes around, they may not have made enough to owe the taxes, so it could be worth filing a separate return for the youth as a dependent at the end of the year to receive a refund of the taxes paid/previously withheld. Honestly, that is a typical scenario we have seen and we are so glad to be able to help those hard working students to get their tax refunds back!
Self-Employed or a 1099: If the student has started their own company or performs babysitting, dog watching, or any other service for cash, this income is taxable. In cases such as these, tracking all expenses (including mileage) related to this job will help to decrease the taxable income, especially since the student is paying double the employment tax as a W-2 employee (the employee AND the employer’s portion).
Tip Income: If the student works at a place and receives tips, those are taxable income. Maintaining records of tips and declaring these on your taxes is what the IRS expects to see on the tax return as well, and virtually all restaurants and businesses that are heavily reliant on tips for employee conpensation report that revenue as paid to each respective employee.
The IRS does provide assistance with taxes through their IRS Free File online portal. If you are ever in need of professional tax advice, please contact your accountant or reach out to us!
Let’s enable our young people, the future of our nation, to develop that good old fashioned work ethic. This work ethic will carry through their professional careers and will help America soar for another 240 years.
Happy Birthday America!
The Volpe Consulting & Accounting Team
For more information on these topics, please visit the IRS website, by following these links: