Working college students are required to pay income taxes. Once college students start earning regular income while still studying are already considered as employed and a part of the nation's workforce and therefore should be liable to pay the appropriate income taxes. There are different kinds of income earned by college students that are considered as taxable. Here is a list of such income sources that would help guide college students on filing for their income taxes to the government.
When you find it hard to figure how much income you should be reporting, it would be wise to include everything that you have received as payment for your services rendered. This includes your salary, wages as well as tips. You can ask your employer to provide you with a Form W-2 sometime at the end of the year so that you can declare all your earnings and follow the necessary steps in trying to file for your income taxes.
When it comes to declaring your tips, include those that are paid for by customers through their credit cards as well as tips as a share from a split with the other employees. Try to keep a record of all the tips you receive daily. Remember to keep an accurate record that would serve as your proof for the tips that you have received during your time of employment. You can also ask for a Form 4070A, which is also known as the Employee's Daily Record of Tips. You can fill this up and include with your income tax filing come tax season. Be sure to state the right information on the form in order to avoid delays and complications later on. State the right name and address, social security number as well as your employer's name and the name of the establishment that you are working in. Each day of the daily record should state the amount of tips earned, whether given by customers or your share from a tips split with other employees. You must also declare other tips that come in non-monetary form such as tickets, passes or other items of value. Remember to state such information on the right date that you have received them.
Self-employment income, such as those earned from babysitting and lawn mowing for example, are also subject to income tax. For this, you are allowed to state your net income or earnings after you have deducted any business expenses that you have incurred as allowed by the IRS. You can get hold of a Publication 535 in order to get a list of business expenses that can be deducted from your income. For self-employed students, income and expenses are declared on Schedule C or C-EZ in your Form 1040.
Most college students might think that paying such income taxes may be a burden for them, especially at a time when they are trying to balance studies with work along with the resulting expenses. But the taxes paid is not lost. They are used to pay for the benefits given to such employees under the social security system. This not only includes the social security benefits but also the Medicare benefits that are also made available to individuals who are self-employed.