I know this really isn't credit-related but so many people here are so informed in all matters "money," and a few are also students, that I thought it wouldn't hurt to try. I'm a full-time student and I work part-time at school. My salary is provided via federal work study which is basically where the government gives me like $1000 a semester and my paychecks are taken from that amount. Now my question is, is that money subject to federal tax? I filled out my W-4 when I started the job, taking 1 deduction for myself. After doing my taxes today, I discovered that I have to pay almost $350 dollars in federal taxes because, now looking back, the school never deducted it from my paychecks, only state and local. I thought this was because this money wasn't subject to federal tax and now, of course, I'm not so sure. Anyone who can help me out there? Thanks so much in advance.
I think it is a taxable income, to be sure look here. http://www.irs.ustreas.gov/individuals/students/display/0,,i1=1&i2=12&genericId=15037,00.html
When I was in college and was had federal work study, it was taxed just like any other income from any other job. I think there is some sort of rule that if the paycheck is small enough (I'm not sure if this is the number of hours or the dollar amount) that taxes are not taken out even though taxes will be owed on it.
Fat Jake and the other are right. If the amount is small, say a gross amount of $100 every week then federal tax won't be taken out because the amount being taxed on is not subject to it. Unfortunately, come April 15 you owe federal, and any additional state tax on your total gross income. To put a stop to this you can request your employer to take out an additional $5-10 per week from your paycheck to pay toward federal withholding. Next year, if you gross income remains the same, you won't owe any tax. Dani
