True North Federal Credit Union
A Step Toward Adulthood: An After-School Job

Whether you're bagging groceries, waiting on tables, or working in retail, the government is going to collect taxes from your wages. Rather than collecting a lump sum of taxes at the end of each year, the government takes a portion of every paycheck.

Your first task on the job is going to be filling out a W-4. For each deduction you claim, the amount of money the government takes out of each paycheck is reduced, reducing any tax refund you might be eligible for at the end of the year.

Each year, by Jan. 31, your employer must send you a W-2 that reports exactly how much money you made over the past year and how much of that was withheld for taxes. This form has most of the information you'll need to file your income tax return.

The IRS (Internal Revenue Service) requires that you file a return if any of the following apply (numbers are for 2005 tax year):

* Your unearned income—for example, dividends on your credit union savings account--was more than $800
* Your earned income was more than $5,000
* Your gross income was more than the larger of $800 or your earned income (up to $4,750) plus $250.

Some pros and cons of having an after-school job are:

* You're a member of the adult working world, which allows you to establish contacts with potential future employers.
* You'll learn and reinforce valuable skills such as time management, the ability to cooperate with others, and commitment.
* You may have less time for your homework and other after-school commitments.
* If you work long hours you'll get less sleep and feel more emotional stress.

Visit us at True North. We can help you get on the right track with your finances.


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