Many young people take food service jobs during the summer. It’s a good way to learn about the working, and tax, worlds. (Photo by Andrea Piacquadio)
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If you’re taking a summer job, whether as a student between semesters or someone whose school days are long gone, be aware of the added earnings’ tax implications.
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Most of us look forward to summer vacations. But for some, summertime means work.
Some hires this season are students working their first job. Others are retirees, picking up a few bucks to supplement Social Security. And in this economy, plenty of in-between workers are using summer side hustles to help cover the rising costs of just about everything.
But all these summer workers share one thing. Regardless of your age (or the season), if you make enough money, the Internal Revenue Service will want a piece of it.
Here are some highlights of the tax matters young, older, and workers bridging those two demographics will face.
Student jobs: A summer job is a rite of passage for many young people. Some save the earnings to pay for future college classes. Others are working so they can purchase the latest big thing that their friends have.
The good news for younger workers whose only job is during school’s summer break is that they likely won’t make enough to owe federal income taxes.
The earnings trigger requiring an individual file a Form 1040 is the tax year’s standard deduction limit. For 2026 filings next year, the standard deduction amount for a single taxpayer is $16,100.
No income tax, but FICA: Note, though, that even if you’re off the federal tax filing hook, your earnings in most cases are still subject to Federal Insurance Contributions Act (FICA) taxes. Those are the amounts that go to the Social Security and Medicare trust funds.
FICA taxes are equal to 15.3 percent of your earnings. If you work as an employee, you’ll pay half that, with your employer paying the 7.65 percent. Most of that amount, or 6.2 percent from both workers and employers, goes to Social Security. The other 1.45 percent is designated for Medicare.
As an employee — for example, as a clerk at a store, lifeguard at the neighborhood pool, or office assistant at a local professional firm — your FICA taxes will be show on the W-2 you’ll get early next year.
But if your summer job is one where you’re the boss — for example, house and/or pet sitting for your vacationing neighbors, tutoring peers who are attending summer school, or selling your unique art creations — you’ll have to cover both the boss and employees FICA portions if you earn enough.
This self-employment tax applies no matter how young (or old) you are. And the earnings amount that triggers the required payment is not that much.
When your net self-employment earnings reach $400, you must pay self-employment tax to cover the FICA amounts by filing Form 1040 Schedule SE (Form 1040). And this filing is mandatory, even if you don’t make enough to require filing a 1040.
Don’t forget other income, parental filings: Again, if a young worker’s income is only from a summer job, that youth probably won’t have to file a tax return.
But if the job was as an employee, and income taxes were withheld, the young person will need to file to get any refund of that money.
And if you are a young person who also earned income during the rest of the year, be ready for the tax filing season when it rolls around next year.
Young workers also need to be aware their parents’ tax filing. If you’re claimed as a dependent on their tax return, the standard deduction rules are a bit different. For 2026, the standard deduction for dependents is limited to whichever is greater:
- $1,350 or
- Your earned income plus $450 up to the tax year’s normal standard deduction amount.
You’ll also need to pay attention to any unearned income, such as interest or dividends, you get during the year. It that comes to at least $1,350 during the 2026 tax year, you’ll also need to file a tax return.
I hope this tax talk doesn’t diminish the excitement of your summer paychecks. But it’s good to know well before tax season any IRS obligations you’ll need to meet. IRS.gov has a special students and taxes section, which includes a piece on taxes and your first job.
You also can check out my earlier mini tax primer for students with summer jobs. It’s from 2024, so the dollar amounts have changed, but tax process is the same.
Retiree earnings: Whether you’re working in retirement to fill idle hours or help pay bills that your savings and Social Security benefits don’t quite cover, the pay will have tax implications.
If Social Security is your sole source of retirement income, those benefits are tax-exempt. But if you have (or are) saving and/or investing or have a post-retirement job, your annual Social Security amount is partially taxable.
If you need the job to make ends meet, or just really want to rejoin the workplace, that will be key to your employment decision. But you also need to be aware of the potential tax implications.
The major one is how it could increase the taxable amount of your Social Security.
When, as a single filer, your combined earnings from work and/or investment income plus one-half of your federal benefits is between $25,000 and $34,000, you’ll owe tax on up to 50 percent of your Social Security benefits. When the total is $34,000 as a single taxpayer, up to 85 percent of your Social Security benefits are taxable.
Tax is assessed on 50 percent of Social Security payments when married spouses have a combined income between $32,000 and $44,000. It goes to 85 percent for the couples with more than $44,000 in combined income.
And if your post-retirement earnings are from self-employment income, the tax rules apply to older workers the same as they do to those just beginning their careers. The IRS requires you to file Schedule SE when your self-employment earnings are $400 or more, even if you are already getting Social Security or Medicare benefits.
Gig work during the summer: Those whose school days are long gone but are far from retiring often take advantage of summer opportunities to boost their income.
In the past, that typically meant spending vacation days at another short-term job. Some companies do hire contractors to fill in when their regular employees go on holiday. That’s particularly true in areas with lots of summer visitors, with opportunities for added work to take care of these tourists’ demands.
If your summer job is a short-term salaried position, your taxes will be covered by payroll withholding. But if you’re hired as a contractor, or are working a side hustle on weekends or after your regular job, you need to be aware of the self-employment tax rules.
The added gig income will be added to your regular wages, generally by filing Schedule C, Profit or Loss From Business (Sole Proprietorship), when you file your Form 1040. And, one more time, you’ll probably have to file Schedule SE, too.
Estimated tax issues: Regardless of your age or type of summer work you do, you should review the estimated tax payment process. This is the self-employed person’s way to comply with the U.S. income tax system’s pay as you earn requirement.
Estimated tax amounts on income not subject to payroll withholding generally are paid by self-employed workers four times a year. They are due the 15th of each April, June, September, and January of the next year.
Paying estimated amounts will prevent you from facing a larger than expected tax bill when you file your annual return.
The payments also will keep you out of tax trouble. If you don’t make quarterly payments, or don’t pay the correct amount each period, you could face underpayment penalties at filing time.
Tracking all your earnings: Finally, a key tax practice will help ensure you meet your summer earnings IRS obligations. Keep accurate and complete records.
Careful record keeping is crucial if your earnings are from self-employment. You might not get enough from some summer jobs to trigger issuance of a tax statement, such as a Form 1099-NEC for nonemployee compensation.
A change in the One Big Beautiful Bill Act (OBBBA) means payors aren’t required to issue this statement for 2026 earnings if the gig or short-term worker did not make at least $2,000. The prior earnings trigger was $600. And the new two grand trigger will be indexed for inflation in future tax years.
If you were paid for your side work through payment apps, those digital settlement entity transactions could be reported on IRS Form 1099-K. The OBBBA change returns the earnings threshold to $20,000 received as part of 200 transactions.
So, many gig workers won’t get documentation of their income. They’ll need to make sure they have the correct data to accurately fill out their returns. I suspect the IRS, now deprived of third-party reporting forms to validate taxpayer entries, will take a close look at all self-employed filers returns.
You can find more guidance at IRS.gov’s gig economy tax center, as well as in my post 5 tax tips for freelancers, gig economy workers.
And if you don’t need or want to work this summer, fantastic! That means, as the late great Sylvester Stewart, aka Sly Stone, noted in the season’s perfect song, that means more time for hot fun in the summertime.
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You also might find these items of interest:
- Do you have to file a tax return? Probably
- 5 tax considerations for young workers and their parents
- 6 reasons to file a federal tax return even if you don’t have to
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