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The Best Jobs For Teens (From a Tax Perspective)

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CarolTopp

Carol Topp

Does your teen want to earn some money? Carol Topp, CPA, tells which are the best jobs when it comes to taxes! Thanks for being here to help, Carol!

By Carol Topp, CPA

I 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 to Sean:

You probably won’t owe federal income tax since your earnings of $4,000 are under the $5,700 threshold for paying income tax in 2010. You may owe federal income tax if you had any other jobs or had interest and dividends from a savings account, etc.

The IRS Code says that a child under age 18 delivering newspapers is exempt from Self-Employment tax and Social Security tax (meaning you do not have to pay self-employment or social security tax). Newspaper carriers get special treatment (so do babysitters and lawn mowers)! 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 these employees 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 for which my 17 year old daughter must pay self employment tax. Income from babysitting and working for me in my business are exempt from self employment taxes.

Carol Topp, CPA

Read more about teenagers and their tax situation at TeensAndTaxes.com

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