Summer is in full swing, meaning that most of us will be taking some time off work to enjoy the warmer weather.
Some people, however, see this traditional vacation period as a way to add to their income. That’s true. But the added earnings also could have tax implications.
Student jobs: Some young people spend their summers working. Whether the earnings go to pay for college classes or a purchase they really, really want, the summer jobs share one thing.
Regardless of your age, if you make enough money, the Internal Revenue Service will want a piece of it.
The key here is how much you make. If your only income for the year is from a part-time summer job, you probably won’t make enough to require you file a tax return.
That’s because all taxpayers can earn up to the standard deduction amount each year without paying taxes on that income. The 2025 tax year standard deduction for single taxpayers is $15,000.
But, if you also earned income throughout 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 2025, 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 2025 tax year, you’ll also need to file a tax return.
The IRS put together a special document with more on what students should know about summer jobs and taxes. There’s also a special students and taxes section at IRS.gov, which includes a piece on taxes and your first job.
And, of course, you can check out my mini tax primer for students with summer jobs post from last summer.
Part-time summer jobs: If your school days are long gone, but you have time during the usual lazy, hazy days of the year to add to your earnings, make sure you understand how that will affect your taxes.
Knowing the tax implications are particularly true if your summer money comes from a side hustle or gig work. In this case, you are your own boss, which can be great, but also includes some new tax considerations.
You must file a tax return if you have net earnings from self-employment of $400 or more from gig work, even if it's a side job, part-time, or temporary. This includes paying self-employment tax via Schedule SE, the independent worker’s version of payroll Federal Insurance Contributions Act (FICA) taxes for Social Security and Medicare.
Estimated tax issues: You also should review the estimated tax payment process, which is the self-employed person’s way to comply with the U.S. income tax system’s pay as you earn requirement.
For salaried or wage earning workers, these income tax amounts are taken care of through paycheck withholding. But when you run your own business, even a part-time summer one, you must make sure the associated income tax is paid in a timely manner.
The self-employed generally do this by making estimated tax payments four times a year. The amounts one earnings not subject to withholding are due the 15th of each April, June, September, and January.
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: In order to pay the appropriate estimated taxes, including self-employment amounts, you must keep track of all your gig earnings.
Careful record keeping is crucial, since you might not get enough from some summer jobs to trigger issuance of a tax statement, such as a Form 1099-MISC or Form 1099-NEC, miscellaneous income and nonemployee compensation, respectively.
The IRS requires the MISC and NEC versions be filed for gig workers when earnings or $600 or more.
If you were paid for your side work through payment apps, those digital settlement entity transactions could be reported on IRS Form 1099-K.
Changes, or attempted revisions, to the earnings’ triggers for 1099-K forms have been in flux as Congress struggles to accommodate the payors and workers while still ensuring that taxes are paid on these earnings.
Currently, third-party settlement organizations (TPSOs), which is IRS speak for payment apps and online marketplaces, must report transactions when the amount of total payments for those transactions is more than $2,500 in 2025, and more than $600 in calendar year 2026 and after.
But that could change.
Political intervention: The House version of the Trump administration’s tax and immigration agenda, also known as the One Big Beautiful Bill (OBBB), changes the filing thresholds for several third-party earnings forms.
The reporting level for 1099-MISC and 1099-NEC forms would increase from at least $600 in a taxable year to at least $2,000 in a taxable year, and be indexed to inflation. The threshold for filing IRS Form 1099-K, payment card and third-party transactions, would go back to the original $20,000 in earnings and 200 transactions threshold.
The Senate has to act on the OBBB, and changes are expected. Whether they will affect third-party reporting is unclear.
But regardless of Congressional action, you need to keep good records of all your side earnings, in the summer and year round. Then report all that income, even if it didn’t prompt any type of 1099, on your tax return next filing season.
The IRS offers more guidance on at its gig economy tax center.
And if you don’t need or want to work this summer, fantastic! That means, as the great Sylvester Stewart, aka Sly Stone, whom we music fans lost last week, noted in the season’s perfect song, that means more time for hot fun in the summertime.
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
- 8 reasons to file a federal tax return, even if the IRS doesn't require it
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