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Question for the Money Doctors

Question submitted on May 16, 2013.

Question

Does my 14 or 15 year old have to have Social Security/Medicare taxes deducted from his summer job? Probably maximum income of $2000.

Answer

Unfortunately, your child is almost certainly going to have to pay Social Security/Medicare taxes. This may give you a wonderful opportunity to discuss taxes with your child so he or she can get an understanding of how this will impact them once he or she is working full-time. If an individual owed no income tax last year and expects to owe none this year, it's possible to avoid income tax withholding by indicating that you are exempt on the W-4 that is filed with the employer.To determine if your child might be eligible to claim this exemption, you should refer to the flowchart on Page 12 of IRS Publication 505 which is available online at http://www.irs.gov/publications/p505/index.html. Claiming this exemption is subject to review by the IRS. However, this exemption from income tax withholding does not apply to Social Security/Medicare withholding.

An exception to Social Security/Medicare is available for up to $1,800 of wages paid to a household employee who is under 18. Since you didn''t mention what type of work your child would be doing, this exception may not apply. Also, if he or she receives over $1,800 as you indicated is possible, all of the wages are counted in determining the Social Security/Medicare tax (not just the portion exceeding $1,800). If your child is working as a household employee, his or her employer may wish to consult IRS Publication 929 to determine their payroll withholding responsibilities.


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