Income Taxes on Student Jobs
Working a part-time job as a student is often a vital part of financing an education. Student jobs range from work study and student assistant employment to graduate teaching and research assistantships. Students (and parents) are typically uncertain about income taxes on student jobs; it's therefore important to understand how other sources of funding, such as financial aid, can affect a student's tax obligations.
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Student Job
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Some student jobs are funded by the federal work study program. Others are on-campus positions. Many students have jobs working for employers other than their schools. The Internal Revenue Service does not put student jobs into a special category. Wages from any job are considered payment for services performed and treated just like other income for tax purposes. Income from student jobs is therefore added to any other income to determine if you owe taxes and to calculate how much you owe.
Income Limits
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Many students are claimed as dependents by parents or other family members. Dependent students with less than $950 in unearned income and less than $5,700 unearned income don't owe any taxes and do not have to file a tax return. Students not claimed as dependent and who are single may earn up to $9,350 before having to file taxes. For married students filing a joint return, the limit is $18,700. These are figures for 2011 and may change in future years (check IRS Publication 17 for current figures).
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Taxes and Financial Aid
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Although taxes on wages aren't affected by your status as a student, some of your financial aid besides work study pay may be subject to income taxes. Money from student loans must be paid back, so it is not income and is not taxed. However, money received from grants, scholarships and other sources that do not have to be repaid may be taxable. In general, this type of student aid is tax free if it is used for tuition, books, fees and other direct costs of education. Excess funds of this type are considered taxable income and must be reported on your tax return.
Considerations
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Some students may have to file a return even if total income is below the IRS limit for their filing status. This is the case if you have self employment income of $400 or more or if you owe uncollected Social Security taxes. You may have to report money taken out of a tax-deferred investment account as well. Another point to remember is that you may have had taxes withheld from a student or summer job. Even if you don't have to file a return, you may want to since you might get that money back as a tax refund.
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