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1:23 PM, Jan. 24, 2008
The best jobs for teens (from a tax perspective)
(view similar articles on Personal Finance and Taxes)
HomeschoolCPA was recently asked:
I am 16 years old and am a newspaper carrier. Do I have to pay taxes? I make around $4000. -Sean in WY
My reply:
You probably won't owe federal income tax since your earnings of $4,000 are under the $5,350 threshold for paying income tax in 2007. You *may* owe federal income tax if you had any other jobs or had interest and dividends from a savings account, etc...
Also the IRS Code says that a child under age 18 delivering newspapers is exempt from Self Employment tax and Social Security tax (meaning you don't have to pay self -employment or social security tax). Newspaper carriers get special treatment (so do babysitters and lawn mowers)! Yeah! You picked a good job (for tax purposes). So the best jobs for teenagers from a tax perspective are:
- Newspaper carriers
- Work for parents in their business
- Babysitting
- Lawn mowing
- House cleaning
- Pet sitting
The last four jobs must be performed by a student under age 18 and in someone's home. They are classified as "household employees", but do not have to pay self employment (SE) tax nor Social Security tax.
What do your kids do for money? Mine babysit, give piano lessons and do bookkeeping for one of my tax clients. Giving piano lessons is the only job that my 17yo dd pays self employment taxes on. Babysitting and working for me in my business are SE tax-exempt. 
Carol
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