Monday, June 2, 2014
A TIMELY PRE-SUMMER TIP
Now is a good time to refer you to a TWTP post from last year titled - GETTING READY FOR SUMMER – FILLING OUT FORM W-4 FOR A SUMMER JOB.
As you read the post substitute 2014 for 2013, and 2013 for 2014. For 2014 the Standard Deduction for a dependent is the greater of $1,000 or the dependent's earned income plus $350, not to exceed $6,200 (plus $1,550 if blind). And the maximum IRA contribution remains at $5,500.
A recent IRS Tax Tip release (“Information for Students Who Take a Summer Job”) provided a good reminder for dependents who will be working as waitpersons or bus persons –
“Keep in mind that all tip income is taxable. If you get tips, you must keep a daily log so you can report them. You must report $20 or more in cash tips in any one month to your employer. And you must report all of your yearly tips on your tax return.”