Student and Child Withholdings

Student and Child Withholdings

A tip for college grads who are starting a full-time job this summer: Use part-year withholding to boost your paycheck and have less tax withheld.  The standard federal tax withholding tables assume you’ll earn a full year’s income when figuring how much income tax to take out.  The part-year method sets withholding according to what you’ll actually earn during the part of the year you’re on the job.  Individuals expecting to work 245 or fewer days in a year can ask their employers in writing to use this method.  If your employer agrees, you’ll have less tax withheld from your paychecks.  It’s better to have the cash now than to wait for a refund in 2020.

Many students with summer jobs can escape federal income tax withholding from their checks if they owed no income tax for 2018 and don’t expect to owe for 2019.  Just write “Exempt” on line 7 of the W-4.  Kids claimed as dependents do not qualify if they’ll have more than $350 in investment income and over $1,100 in total income. Workers who can block income tax withholding could still see their pay nipped by the 7.65% levy on employees that helps pay for Social Security and Medicare.