We salute the brave troops who gave their lives for our freedom. May we never forget or take for granted the ultimate sacrifice they made for our country.
Students with summer jobs can be exempt from federal income tax withholding if they did not owe any tax last year and do not expect to owe any for 2013. Students with unearned income of $350 or less and total income not greater than $6,100 can be exempt from federal income tax withholding. If their investment income is more than $350, the total income cannot exceed $1,000 to be exempt from federal income tax withholding.
Employers re-hiring summer students claiming exemption need to have employees complete new W-4 forms. The W-4 forms completed last year cannot be re-used.
Sole proprietors or husband-wife partnerships can hire their kids under the age of 18 and not owe any FICA tax. The same rules apply to a one-person LLC that elects to be disregarded for tax purposes. Federal unemployment tax is not due on kids’ salaries until they hit the age of 21.
For those kids branching outside the family business to earn their money, read about these tax rules in the article, “Kids and Summer Jobs: What to Know About Taxes“, from Fox Business by Bonnie Lee, a fellow Enrolled Agent.
Plan a great summer with these great tax tips!
Many of you heard the Senate passed the bill for sales tax on internet purchases. The bill now hits the House for an uphill battle with key members indicating they are not in a hurry. The House Judiciary Committee has jurisdiction over matter affecting state taxes and they will be taking their time with this matter. The word from House Members is they consider the exemption for small retailers on the Web to be too low and they want rules for sellers in states without sales taxes to be less stringent.
The proposed bill says the earliest collection could begin the first quarter that occurs six months after the bill is enacted. This tells us no purchases during 2013 will be affected. Stay tuned for updates as information becomes available.