How Summer Activities Can Impact Your Taxes: Tips from the IRS
As summer approaches, many people are looking forward to weddings, summer camps, summer jobs, home improvements, and business travel. But did you know that these activities could have an impact on your taxes next year? The IRS has identified five key summer activities that could affect your taxable income, along with some tax planning tips to help you navigate them.
First on the list is weddings. If you’re getting married this summer, there are a few things you need to do to make future tax filings easier. Make sure to report any name changes to the Social Security Administration and update your mailing address with the IRS. Additionally, consider how your filing status and tax deductions may change now that you’re married.
Next up is summer camp. If you’re sending your child to a camp program this summer, the cost might qualify for the Child and Dependent Care Credit. Keep detailed records of camp fees to ensure they meet IRS eligibility requirements and maximize your tax benefits.
Summer jobs are also a common activity during the summer months. Even if you don’t earn enough to owe federal income tax, the IRS recommends filing a tax return to potentially receive refunds. If you have gig work or side hustles, be sure to understand how these earnings can impact your taxes.
Home improvements are another popular summer activity. Certain energy-efficient upgrades to your home can qualify you for tax credits, such as the Energy Efficient Home Improvement Credit or the Residential Clean Energy Credit. Keep all receipts and documentation to claim these benefits.
Lastly, business travel can also impact your taxes. If you’re self-employed and travel for work, you can generally deduct certain expenses like airfare, lodging, and meals. Familiarize yourself with IRS guidelines on business travel to maximize your deductions and reduce your taxable income.
Overall, staying informed about how these summer activities affect your taxes can help you manage your tax liability and potentially save money. Consult a qualified tax professional if you have any questions about how specific activities may impact your personal tax situation.