ADVICE: Does Your Child Have a Summer Job?

by Victoria W. Young, CPA, Principal  | Santos Postal

As Alice Cooper once stated, “School’s out for summer!”

Based on the many calls we get this time of year, parents are also asking, “How many allowances should my child be taking when they complete IRS Form W-4 for their summer job?”

In the simplest terms, a child that can be claimed as a dependent on their parents return does not need to file their own tax return if the child has less than $7,900 of earned income and less than $2,600 of unearned income for the year.

If your child falls within these income parameters, and they had no liability for 2017, they should claim exemption from tax withholding by writing “EXEMPT” on line 7 of Form W-4.  By doing this no tax will be withheld from their paycheck, providing the student with greater take home pay, and they will not have to file a tax return, saving the parent the cost of preparing and filing the student’s return in order to recoup the taxes they paid.

Victoria W. Young, CPA, Principal

Vicki Young joined Santos Postal in August 2013 when her former firm merged with Santos Postal. She has been a CPA for over 30 years and was recently promoted to Principal. Her focus is on all areas of taxation, with an emphasis on individual, fiduciary and estate work.