Tax Tip of the Week
900 N. Kings Highway, Cherry Hill, New Jersey 08034
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215.563.0276 ·
Fax: 856.667.3652
For the week of
May 15, 2000
Students: Avoid unnecessary tax withholding on your summer job
Many students end up filing an income tax return to get a
full refund of all the income tax withheld during their summer employment. If they meet the requirements and file
a proper W-4, they can avoid having the income tax withheld in the first place. This saves both the student and
the government time and money.
The basic rule is that students who can be claimed by their parents as dependents can claim exemption from income
tax withholding on Form W-4 if:
- Unearned income (dividends, interest, etc.) for the year
will be $250 or less, and total income won't exceed $4,400.
OR
- Unearned income for the year will be more than $250, but total income won't exceed $700.
If you cannot be claimed as a dependent on another's tax return,
your total income must be under certain limits (determined by your filing status) for you to use the exemption
from withholding.
When you fill out form W-4 and claim exemption from withholding, you are certifying that you meet both of the following
conditions:
- Last year, you had a right to a refund of all federal income
tax withheld because you had no tax liability.
AND
- This year you expect a refund of all federal income tax because you expect to have no tax liability.
A W-4 that claims exemption from withholding is good for only
one year. If you do not file a new W-4, your employer is required to withhold income taxes from your wages.
If you have questions, please contact us. We
are here to help you.
Click here to view previous tax tips.
"Tax Tips" are published weekly to
provide useful tax information. Return to this site every week for helpful tax-cutting suggestions, tax reminders,
and current tax information.
The information contained in this site is of a general nature and should not be acted upon in your specific situation
without further details and/or professional assistance.
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to receive other tax-cutting information from time to time, please contact our office. We're here to help.
