It’s a good idea for kids to learn how to work. A summer job might be just the thing. Indeed, a summer job is probably one of the best things a teenager can do to learn about hard work, and to learn about money management. Even if you feel that a high school job isn’t necessary during the school year, once summer rolls around, there are few things as rewarding as a summer job for a teenager.
Not only can a summer job help your child earn money, but it can also reduce the number of times you hear “I’m bored” echoing throughout your home. However, even as your teen learns valuable life skills and makes more money, it’s important that your remember that Uncle Sam is likely to want his cut. There’s a chance that your teenager will also end up paying taxes on his or her summer job. (And, if your child has investment income, don’t forget about the kiddie tax.)
Generally, if your teen is your dependent, he or she doesn’t even have to file a tax return unless he or she makes more than the standard deduction. For 2012, the standard deduction for singles is $5,950. As long as your teenager doesn’t make more than that, you don’t have to worry about his or her taxes. When filling out the W-4 for an employer, your teen might be able to claim an exemption on Line 7 is he or she is pretty certain that wages for the year won’t exceed the standard deduction.
While that is pretty straightforward, things get a little stickier if the employer uses different employee designations.
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