Oh, hallelujah, it’s summertime! School’s out, vacation time is here. Days are longer and filled with fun from morning to night. It’s not the time one usually thinks about income taxes but these summertime tax tips may make it much easier to file taxes next April.
Kids love summer camp and everybody wants to go. Camp is great for keeping kids occupied in meaningful endeavors while parents work. Better still? The cost of summer camp might be tax deductible. Camps that include overnight stays do not qualify but day camps just might.
Many homeowners look forward to the longer days and milder weather of summer to clean out the garage, the attic, and all the closets, nooks, and crannies where stuff gets stashed throughout the year. Summertime is the season of the yard sale.
Yard sales aren’t limited to just the yard anymore, thanks to the wild popularity of selling unwanted things online. It can be a real gold mine but it might be skirting the edge of a home-based business rather than an annual clean sweep.
If the yard sale outgrows IRS definitions of merely an occasional housecleaning chore and becomes more like an online business, you might be able to deduct business expenses, including home office expenses. Check these IRS tax tips for online auction sellers to determine which records to keep.
Cleaning out the clutter is only one way people tend to work toward home improvement in the summer. The predictability of summertime weather makes this an ideal time to tackle home improvement projects much bigger than yard sales and the long, hot days of summer often make us think of energy consumption as the air conditioner seems to run non-stop.
Home improvement projects that increase the home’s energy efficiency often come with energy credits that reduce household tax bills come April 15. Find out how to get credit for making your home energy efficient by discussing your plans with your accountant or researching the issue online at the IRS website. As the demand for increased efficiency grows, tax laws are adjusted to reflect consumer demand and the government incentives that define which improvements are tax deductible. Be sure to check with a tax advisor every year big-ticket home improvement projects are in the works.
Some kids love summer camp so much they choose to work as camp counselor when they’re old enough. Others become babysitters and food servers or man concessions at tourist venues. Lawn maintenance and odd jobs are popular with kids during the summer. There are many job opportunities for students during the summer that aren’t available the rest of the year and, let’s face it, every kid loves the idea of having a little extra cash in their pocket. Parents like it, too.
Depending on the pay situation and the age of the working child, summer jobs might incur income taxes for the child. Taxes on income might be in order but expenses that make that summer work possible might be tax deductible. Study up on this lesson from the IRS for students starting a summer job for the biggest tax advantage next year.
Have lots of fun in the summer sun but remember it might even be tax deductible, too!