Seasonal jobs, taxes and employment scams, oh my!
Friday, November 22, 2019
Thanksgiving is still a week away. It's another month-plus until Santa puts presents under trees.
But holiday shoppers have been hitting the stores and online hard thanks to early Black Friday sales.
In fact, more than half of consumers have already started this year's holiday shopping and nearly a quarter of planned purchases have been made, according to the annual survey conducted by the National Retail Federation (NRF) and Prosper Insights & Analytics.
Still, there's plenty of shopping and shoppers to do it out there. That means that retailers still are looking for help to handle the remaining seasonal shopping crush.
The NRF says that consumer-oriented businesses nationwide are expected to hire between 530,000 and 590,000 temporary workers this holiday season. That's an increase from the 554,000 hired during the holiday period last year.
If you're one of those folks looking for a short-term job to help cover your own seasonal shopping spree, there are two things you need to keep in mind: taxes (of course) and scams.
Hiring designation affects taxes: Whether you get a seasonal job at a store or come up with your own side hustle to earn a few extra bucks this year, remember that the extra pocket money also will affect your eventual 2019 tax bill.
If you're hired as an employee, make sure you take the added income into account when figuring your withholding.
Since you're taking on the added employment, it's tempting to have as little withheld from that pay as you can. After all, the whole reason is to have more cash on hand.
But remember that all your income sources will affect whether you have enough taken out of your pay so that you don't owe a tax bill (and possible penalty!) when you file your return next year.
Consider using the Internal Revenue Service's new paycheck withholding estimator. That will tell you what to enter in the Form W-4 you'll file with your short-term employer.
If you're being paid as a contract worker or you started your own seasonal gig, you're responsible for any taxes due on the job. That means you'll need to account for the November and December income via the final estimated tax payment for the 2019 tax year. That's due Jan. 15, 2020.
Jobs you get now through Dec. 31 and where your pay isn't subject to withholding are covered in the final earnings period for estimated taxes. That payment will be due on Jan. 15, 2019.
No more job search write-off: Also remember that job search expenses, seasonal or any time of the year, are no longer tax deductible.
These costs were part of the miscellaneous expenses category on Schedule A. The Tax Cuts and Jobs Act, however, eliminated that segment of itemized deductions.
True, not many people were able to claim job search costs anyway because miscellaneous expenses had to exceed 2 percent of the filer's adjusted gross income. But I wanted to point it out in case you've been hanging onto or plan to save such receipts. You can toss them.
Don't fall for employment scams: Then there are the scams that pop up this time of year.
Most of the time, they are aimed at consumers, not workers. But crooks are equal opportunity prey seekers.
Employment scams were the riskiest scam nationally in 2018, according to BBB Scam Tracker statistics. So far in 2019, more than 2,500 employment scams have been reported nationwide, according to the monitoring system.
If you are looking for employment, beware of scam job postings, fake recruiter emails and work-at-home schemes.
Just like tax scammers, work-related cons often use real company names and can be very convincing. It may look as though you are starting a great new career, but you are really giving personal information or money to scammers.
The BBB offers these tips on spotting work scams:
- Always be wary of work-from-home or secret shopper positions. The same skepticism is warranted for jobs advertised with generic titles such as caregiver, administrative assistant or customer service rep. Positions that don't require special training or licensing appeal to a wide range of applicants. Scammers know this and use these otherwise legitimate titles in their fake ads.
- Check out postings from well-known companies. If the job posting is for a well-known brand, check the real company's job page to see if the position is posted there. Also look online. If the job comes up in other cities with the exact same post, it's likely a scam.
- Watch out for on-the-spot job offers. You may be an excellent candidate for the job, but beware of offers made without an interview. A real company will want to talk to a candidate before hiring.
- Avoid opportunities that want you to pay for the job, such as offers that promise to give you special access or guarantee you a job for a fee. If you are paying for the promise of a job, it's probably a scam.
- Be careful if a company promises you great opportunities or big income as long as you pay for coaching, training, certifications or directories. Also, be wary of jobs that require you to buy expensive equipment and supplies from designated suppliers (likely just part of the scam) to work at home.
- Don't fall for an over-payment scam. No legitimate job would ever overpay an employee and ask for the excess payment to be wired elsewhere. This is a common trick used by scammers. Also be cautious about sharing personal information or any kind of pre-payment.
It's work to get work: I know, about now you're wondering if the extra job is worth it.
You do, after all, have to deal with the added pains of searching for, vetting offers and getting another job, as well as dealing with the added tax matters.
As for those taxes, yes, the withholding — or putting aside some earnings to pay your estimated taxes next year — will take a bite out of the extra cash you're hoping to stash this holiday season.
Then you look at your kids' wish lists or remember that special present you want to buy for that special person in your life.
As long as you know what your new, real job will entail, tax and otherwise, the seasonal work probably is worth it.
Temporary tax work: Finally, here's a tip that combines seasonal work and taxes in the most meta way possible.
If you're looking for a job to boost your holiday spending budget, the IRS might be able to help.
I got the postcard shown below this week. No, even though I write about taxes, I'm not special in the IRS' eyes — and that's fine with me. The taxman doesn't have to pay me any extra attention at all, during the holidays or ever!
The postcard was addressed to "Resident" so all my neighbors got one. Probably most Austin area folks did, too, since there's an IRS facility in the Texas capital. And Uncle Sam's tax collector says he has more than 2,100 positions in that facility.
Here in Austin, the IRS is looking for clerks, data entry clerks and tax examining technicians.
All IRS positions, both in my neck of the tax woods and across the United States, are posted on USAJOBS. If you're interested in an IRS job, your first application step is to create a profile at that website. Then visit the IRS page on USAJOBS and look for the job announcement number.
Full time IRS positions are for 40 hours weekly. Part-time positions are from 16-to-32 hours a week and may include weekends.
Temporary employees can work from a few weeks to a few months in a year. Seasonal employees are scheduled to work at least three months and may be able to return year after year.
And even if you don't need or want a job now, bookmark the USAJOBS website. New part-time and temporary positions are posted there periodically.
Good luck on wherever you find your seasonal (or longer) job and happy shopping with your extra earnings.
You also might find these items of interest:
- 4 tax matters that matter for the self-employed
- 5 tax tips for freelancers, gig economy workers
- Employee or contractor? The IRS has some guidelines on when each work status applies
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