Seasonal work can be tricky when it comes to tax reporting and income management. So, there’s much you need to know about reporting income when you have a job that isn’t year-round.
What Are Examples of Seasonal Work?
Seasonal workers or employees are those who perform work or a service for a company for part of the year rather than the entire year. May jobs considered to be seasonal last anywhere from three to eight months but can be more or less than this depending on a specific situation.
Some examples of seasonal work include:
- Call center reps
- Camp counselors
- Gift wrappers
- Landscapers
- Lifeguards
- Package delivery drivers
- Restaurant servers
- Retail sales associates
- Tour guides
- Tutors
- Warehouse associates
Does the IRS Think About Seasonal Workers Differently from Full-Time or Part-Time Employees?
If you are a seasonal worker, whether it is just for a short time or ongoing, you must report seasonal income earned when you file your taxes. The same IRS tax withholding rules apply whether you’re a seasonal, part-time, or full-time employee.
In some cases, you may not have to file taxes if you are someone else’s dependent or your total income is less than IRS tax filing thresholds. You can view current IRS reporting thresholds by filing status at https://irs.gov/newsroom/who-needs-to-file-a-tax-return.
Will I Have to File a W-4 for Seasonal Work?
Yes, when you’re an employee, even seasonal, you fill out a W-4. This allows your employer to report the income earned from your seasonal job – no matter how long the job lasts or how much you earn – to the IRS. Filing a W-4 doesn’t necessarily mean you will have to pay taxes, but you still need to report your seasonal income.
Do I Include Seasonal Job Income on My Tax Return?
Yes, you report seasonal income to the IRS on your tax return. As mentioned earlier, you may not have to pay taxes when you’re a dependent or your total income from all jobs is less than IRS filing thresholds. Remember, even when you don’t owe taxes on seasonal income, you must include this income when you file taxes.
When it comes to seasonal work, it does not matter how many hours you work, but it does matter how much you earn.
If I Receive Tips from Seasonal Work, Is That Money Considered Income?
Yes, when you earn tips at seasonal jobs, you will need to report them to the IRS as part of your income. Tips count in the same way that any other wages you earn count, and it’s your responsibility to record and report tip amounts. The IRS requires people to report tips when they make more than $20 in tips in a month. This makes it important to keep track of your seasonal income and associated tips.
How Are Taxes Withheld if I Have a Seasonal Job for Only a Few Months Out of the Year?
Once you are hired for a seasonal position, your employer will have you complete a W-4. This provides the employer with information they need to let the IRS know how much you are paid for seasonal work and how much tax was withheld from your checks.
If you only work a few months of the year, you may not want to have too much tax withheld, though, since the amount typically withheld is for a 12-month work calendar. If you work under 245 days a year, you will need to use the part-year withholding method to determine how much tax should be withheld. You can read more about the part-year method in IRS Publication 505 at https://irs.gov/publications/p505.
Can I Claim Tax-Exempt Status as a Seasonal Worker?
You may be able to claim tax-exempt status in some seasonal job situations. For example, you received a refund for the last tax year that equals your federal income tax withheld from your checks that year. In this case, you did not owe any taxes. If that same situation applies here – and you are sure you do not owe more – you may be able to claim tax-exempt status this year.
What Options Do I Have When I Can’t Pay My Seasonal Job Taxes?
Don’t worry if you owe taxes from seasonal work and cannot pay them in full. The IRS will help you pay back taxes as long you make an effort to work with them. Tax relief options range from short-term and long-term monthly payments plans to reducing your tax debt liability (Offer in Compromise) and temporary collection delays (Currently Not Collectible status).
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