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Even college students pay income taxes

On Behalf of | Apr 17, 2019 | Income Taxes

College students who participate in a paid internship in Georgia or any other state may owe federal taxes on their earnings. This could be true even if participation in the internship is required by the school. In some cases, individuals are paid as independent contractors, which means that they will receive a Form 1099 as opposed to a traditional W-2. The difference is important as it determines how much in FICA taxes an individual is required to pay.

It also will determine whether that money is withheld from a paycheck or if the worker is required to pay it during the course of the year. Those who owe more than $1,000 in taxes are generally required to make estimated payments quarterly. Self-employment taxes are equal to 15.3 percent of a person’s paycheck. Of that amount, 12.4 percent goes toward the Social Security system while the other 2.9 percent goes to the Medicare system.

However, if a college student were to make less than $12,000 in a year, it may not be necessary to file a return. Ideally, an individual will ask before accepting a position if he or she is labeled as an independent contractor or as an employee. It is also a good idea to review pay information periodically to ensure that it is being recorded accurately.

Individuals who fail to pay income taxes owed by the time they are due might face a financial penalty. If the failure to pay was willful, an individual may face the possibility of jail time or other criminal penalties. The government may also place a lien on personal or business assets or take other steps to obtain any balance it is owed. An attorney may help an individual resolve their tax problems in a timely manner.