Are My Taxes Too High for My Summer Job?

  • Thread starter Thread starter pergradus
  • Start date Start date
  • Tags Tags
    Taxes
Click For Summary

Discussion Overview

The discussion revolves around the taxation of income from a summer job, specifically focusing on the withholding rates and the implications of various taxes such as federal income tax, Medicare, Social Security, and state tax in New York. Participants explore the nuances of tax withholding, potential refunds, and the process of adjusting withholdings.

Discussion Character

  • Exploratory
  • Technical explanation
  • Debate/contested
  • Mathematical reasoning

Main Points Raised

  • One participant reports a total tax withholding of 16.5% from their paycheck, questioning the fairness and necessity of paying Medicare and Social Security taxes at a young age.
  • Another participant asserts that while Medicare and Social Security taxes are mandatory, the individual will likely receive refunds for federal and state income taxes due to low income.
  • A participant from California notes that tax rates may vary by state and suggests that the withholding may be based on an annual income assumption rather than a summer job context.
  • Concerns are raised about the purpose of withholding taxes if the individual expects to receive a refund, with some suggesting it acts as interest-free credit for the government.
  • Participants discuss the possibility of declaring exemption from federal tax withholding if the individual is certain they will not owe taxes, referencing the need to file a tax return to reclaim withheld amounts.
  • Clarifications are made regarding the difference between W-2 and W-4 forms, with emphasis on the need to fill out a W-4 to adjust withholding amounts.
  • Warnings are given about the potential consequences of not withholding enough taxes if the individual ends up owing money, which could lead to complications in future tax filings.
  • Participants confirm that any excess withholding can be reclaimed when filing taxes, alleviating concerns about losing money due to over-withholding.

Areas of Agreement / Disagreement

Participants generally agree that the individual will likely receive refunds for federal and state income taxes, but there is no consensus on the necessity or fairness of the withholding process, particularly regarding Medicare and Social Security taxes. The discussion remains unresolved on the best approach to manage tax withholdings.

Contextual Notes

There are limitations in understanding the specific tax implications due to varying state laws and individual circumstances. The discussion reflects a range of personal experiences and interpretations of tax regulations, which may not apply universally.

pergradus
Messages
137
Reaction score
1
So I have a summer job doing research for a professor at my school and I'm paid by the hour. I live and work in New York State.

I got my first check today, and a total of 16.5% of my check was taken by taxes. I paid:

9.12% in Federal Income Tax
1.45% in FICA Medicare Tax
4.61% in FICA SS Tax
1.78% in NYS Tax

I live on my own, I don't get any financial assistance from anyone, I have no health insurance, and I don't expect to earn more than $5000 this summer, which will probably be all I earn for the entire year.

Do those rates above seem right?? Do I really have to pay for crap like Medicare and Social Security when I'm 22 years old? I tried using a tax calculator online, and it said:

Based on the information you previously entered, your anticipated income tax for 2011 is $0. If you do not change your current withholding arrangement, your withholding for 2011 will approximately equal your tax, and any refund or balance due should be less than $25.

I don't understand what this means... does this mean I'm not eligible for any refund at the end of the year, or that I shouldn't be paying any income tax?? I have tried asking the payroll people at my school but they refused to answer questions citing it is against school policy to give students advice on their taxes and that I have to ask my parents, but unfortunately I have none. Any help?
 
Physics news on Phys.org
Yes, you have to pay for that "crap". What did you think, you're going to go through life not paying for it and then draw it like everyone else?

You won't owe any state or federal income tax though so you'll get all that back.
 
First you cannot take this as absolute. I live in California and at least the state tax portion may be different. That said...

It sounds like the school is using a standard tax table to withhold taxes. The table assumes that the income is annual, meaning that this is not a summer job that will go away. The Internet tax calculator on the other hand treats your total income as an annual income. As annual income it sounds like $5000 is less than your standard deduction and results in no tax due.

If withholding remains as it is, you should be eligible for a refund when filling. If this is all of your income for the year.., you have no other taxable income.., you may wish to consult a tax 'man' to see if changing your dependents is an option, to reduce the withholding.

REMEMBER I AM NOT A TAX PROFESSIONAL. DO NOT TAKE THIS AS DEFINITIVE TAX ADVICE.
 
Last edited:
I don't understand, if I will get it all back what's the point of withholding it in the first place? Is it just interest-free credit for the government?
 
You will not get a refund for the Medicare and SS taxes. However, you will get one from the feds for the federal income tax and from the state of NY for the NYS state tax. You can avoid the withholding for these by filling out a W-2 form. Ask HR for one. You have to fill out your tax forms next April to get the money back that is coming to you, the govt will not give you the money unless you do.
 
They don't know you will get it all back. And yes, it is interest-free credit. The government must save about $50 million a year doing this.
 
If you're sure you won't actually have to pay Federal income tax on your income this year, you should be able to declare to the university's payroll or HR department that you are exempt from federal tax withholding. There's an IRS form (I've forgotten the number) for making this and other changes to your federal withholding.

Anything that's already been withheld for Federal tax, you'll have to get back next year by filing a tax return.
 
Jimmy Snyder said:
You will not get a refund for the Medicare and SS taxes. However, you will get one from the feds for the federal income tax and from the state of NY for the NYS state tax. You can avoid the withholding for these by filling out a W-2 form. Ask HR for one. You have to fill out your tax forms next April to get the money back that is coming to you, the govt will not give you the money unless you do.

Jimmy, FYI pergradus,

Did you mean to say a http://www.google.com/webhp?hl=en&t...c.r_pw.&fp=951dc7972bfd90fb&biw=1366&bih=585" form, to have less taxes withheld ?

Rhody... :biggrin:
 
Last edited by a moderator:
rhody said:
Jimmy, FYI pergradus,

Did you mean to say a W-4 form, to have less taxes withheld?

Rhody... :biggrin:
Yes, of course. The W-2 is the form that the employer will send you and which you then send to the IRS and NY state office to get your refund. You need to fill out a W-4 so that there will be no more withholding. The amount already withheld will not be returned to you until you fill out your tax forms in April next year.
 
  • #10
Be careful, though. If you actually owe them money and tell them not to withhold, the IRS will indicate their displeasure by making you file quarterlies in the following years.
 
  • #11
Last edited by a moderator:
  • #12
So even if they are withholding too much money, or I messed up on my W-2 and they are taking more than they should, if I file next year I can always get back the correct amount?

i.e. I'm not losing money?
 
  • #13
correct
 
  • #14
Also, if you are due money back, don't wait until April, that's the deadline to file to PAY additional tax. If you are due a return, file as soon as you receive your W2, which should be by Jan 31st.
 
Last edited:
  • #15
PAY additional taxes??

I always get paid back, and I'm anxiously waiting for this years' pay-back of about 1500 dollars worth of kroner..
 

Similar threads

Can Home Repair or Renovations Reduce One's Taxes?
  • · Replies 1 ·
Replies
1
Views
2K
High state property taxes- pork barrel spending?
  • · Replies 6 ·
Replies
6
Views
2K
Difference in Pay for HS Teachers vs Private Sector Job
  • · Replies 6 ·
Replies
6
Views
2K
Other Struggling to Find a Job – Considering My Next Steps
  • · Replies 8 ·
Replies
8
Views
3K
Job Skills Degrees with actual guaranteed jobs after graduation?
  • · Replies 80 ·
3
Replies
80
Views
6K
Engineering Challenging situation in finding a job in my field
  • · Replies 13 ·
Replies
13
Views
2K
Engineering What high paying low competition jobs/fields can a recent grad in electrical engineering go into?
  • · Replies 8 ·
Replies
8
Views
5K
Why Does Mitt Romney Pay Lower Taxes Than His Secretary?
  • · Replies 95 ·
4
Replies
95
Views
10K
Engineering Would I be crazy to quit my Summer Engineering Internship?
  • · Replies 5 ·
Replies
5
Views
2K
How much should my tax return be?
  • · Replies 24 ·
Replies
24
Views
35K