What income earned by students is taxable?
What income earned by students is taxable?
Taxable Income for StudentsThe following kinds of income often received by students are generally taxable.
Pay for Services Performed When figuring how much income to report, include everything you received as payment for your services. This usually means wages, salaries, and tips. Wages and Salaries Tips Keep a daily record or other proof of your tips. You can use Form 4070A, Employee's Daily Record of Tips. Your daily record must show your name and address, your employer's name, and the establishment's name. For each day worked, you must show the amount of cash and charge tips you received from customers or other employees, a list of the names and amounts you paid to other employees through tip splitting, and the value of any noncash tips you get, such as tickets, passes, or other items of value. Record this information on or near the date you receive the tip income. Reporting tips to your employer To report your tips, you can use Form 4070, Employee's Report of Tips to Employer. To get a year's supply of this form, ask your employer or call the IRS for Publication 1244, Employee's Daily Record of Tips and Report to Employer. Fill in the information asked for on the form, sign and date the form, and give it to your employer. If you do not use Form 4070, give your employer a statement with the following information:
Withholding on Tips Any taxes that remain unpaid may be collected by your employer from your next paycheck. If withholding taxes remain uncollected at the end of the year, you may be subject to a penalty for underpayment of estimated taxes. See Publication 505 , Tax Withholding and Estimated Tax, for more information. Form W-2 |