Tax Return Ideas To Get Ahead

There are a number of reasons that people obtain seasonal jobs.  It could be to earn extra spending money, to get a foot in the door at a company you want to work at or gain new skills. It could also be to try out a new career entirely. However, many people don’t realize that they need to report money they make from a part-time or temporary job to the Internal Revenue Service.  Taking on temporary employment can have an impact on your taxes.

The part-year tax withholding method allows your employer to adjust the amount of taxes they withhold from your paycheck, so you don’t wind up overpaying upfront. If you start a new job late in the year or take a seasonal position, the standard withholding method would result in too much being withheld from your earnings. You are eligible for part-year tax withholding if you were employed for less than 245 days during the current calendar year. 

If you work a seasonal job, holiday job, or have temporary work, you should consider the part-year method. Also, if you are starting a new job late in the calendar year, this will prevent over-withholding from your paycheck.  Over-withholding is when too much income is withheld in taxes throughout the year. On the one hand, it does typically result in a large refund on your tax return. While some people like receiving a significant refund, others would rather see the “extra” money in their paycheck from month to month. With costs rising, it is a good idea to have access to available wages in real time, rather than having to wait to have your money refunded to you.  The simplest way to avoid overwithholding is to check your W-9 to make sure you are selecting the correct number of allowances.

Part-time and seasonal employees are subject to the same tax withholding rules that apply to other employees. Now is a good time to perform a “paycheck check-up” using the Withholding Calculator, a special tool on the IRS website that can help taxpayers with part-year employment estimate their income, credits, adjustments and deductions more accurately. It also checks to see whether a taxpayer is having the correct amount of tax withheld for their financial situation.

You can find the calculator here: Tax Calculator

First, the calculator will ask about the dates of a taxpayer’s employment and accounts for a part-year employee’s shorter employment rather than assuming that their periodic tax withholding amount would be applied to a full year. Next, the calculator makes recommendations for part-year employees accordingly. If a taxpayer has more than one part-year job, the Withholding Calculator can account for this as well.

There are many companies in the area that need your skills, hard work, and determination. After learning about your skill set, goals, and interests, the skilled staff at LaborWorks will do our best to match you with the perfect part-time, full-time, or seasonal job opportunity.  It’s never too late to start something new.  Let’s connect today!  

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