Summer may be ending, but no matter what time of year it is, you should know how summertime activities can affect your taxes when you file the following year.
Let’s look at the events that transpire in the summer months that might have an effect come tax time.
Getting Married?
How you can make tax time less stressful if you get married in the summer.
One of the most important steps you should take after marriage is report any name changes to the Social Security Administration. Then, make sure you reach out to the U.S. Postal Service — as well as the IRS and your employers — to notify them about a change of address, if applicable.
What about summer camp?
Do you have children who attended summer camp? If so, camp-related expenses might make you eligible for the Child and Dependent Care Credit.
Can you deduct business travel?
Unlike school, work obligations don’t go away in the summer. But the good news is that you can deduct business-related expenses when you travel for work.
What should you do if you take a part-time job in the summer?
A lot of older kids and college-aged students like to pick up gigs here and there during the summer. This type of part-time work can help pay for college or give teenagers a way to save money to purchase various incidentals; you never know. There are even adults who take on part-time summer jobs!
No matter your situation, anyone who gets paid for work should file a tax return through the IRS to obtain any refunds they are owed. Seasonal workers are encouraged to visit the Gig Economy Tax Center at irs.gov to see how part-time jobs or gig work opportunities might affect them when it’s time to file their taxes.
If you receive reimbursements through payment apps for services that you perform throughout the year, be sure to familiarize yourself with IRS Form 1099-K.
What about home improvement projects?
It’s common to hear neighbors hammering nails, using their power tools, and mowing their lawns throughout the day during the summer. After all, the warm weather makes it easier to spend time on home improvement projects, especially outdoors.
If you’re thinking about sprucing up your landscape or starting that renovation project you’ve been putting off, consider making qualified energy-efficient improvements to your home. That way, you might qualify for a tax credit the following year. Note that you can claim this tax credit for home improvements through 2032.
What are the tax credits regarding energy-efficient home improvements?
Here are a couple of examples:
The energy efficient home improvement credit: This credit applies to replacing water heaters, exterior windows and doors, and heating and air-conditioning systems.
The residential clean energy tax credit: This credit applies to the installation of solar water heaters and fuel cells, as well as battery storage and solar, wind and geothermal power generation.
For clarification, make sure you visit the Home Energy Tax Credits page at irs.gov to learn more about eligibility and qualifications for these tax credits.
Don’t let tax season dull your excitement for summer but try not to forget about it entirely. You never know how the activities you participate in during the summertime could be fruitful come tax filing season.
Contact us before you file your taxes to ensure you’re maximizing your deductions.