For many, summer is a time for relaxation, fun, and adventure. But did you know that certain summertime activities might affect your taxes?
The IRS has identified five things you might do this summer that could impact your taxable income next year, along with some tax planning tips to help you navigate them. Here they are.
1. Wedding (Getting married)
Summer is a popular season for weddings, and the IRS reminds newlyweds to take steps to make future tax filings a bit easier.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
- First, if there has been a name change, you must report it to the U.S. Social Security Administration to ensure that the name on your tax return matches your Social Security records.
- Second, if you have moved, you should notify the United States Postal Service, your employers, and the IRS.
- Note: Just so you know, you must complete and submit Form 8822 to officially change your mailing address with the IRS.
Updating these details now can help save time and avoid complications when filing your first tax return after getting married.
Also, remember that whether you pay less income tax when you're married depends on several factors including tax deductions and credits you may claim, filing status (e.g., separately vs jointly), and your federal tax bracket.
2. Summer camp: Is it tax deductible?
Surveys show that good summer camps can be hard to get into in many areas of the U.S. But if you can send your child to a camp program this summer, the cost might qualify for the Child and Dependent Care Credit.
- This credit is available for costs related to the care of children under age 13.
- The tax benefit can offset expenses associated with the care of those children, including summer day camp fees if the care is necessary for a parent(s) to work or look for work.
To take advantage of this tax break, keep detailed records of camp fees to ensure they meet IRS eligibility requirements. For more information, see Is Summer Camp Tax Deductible?
3. Summer jobs
Summer often brings opportunities for part-time and seasonal work. Even if you don't earn enough to owe federal income tax, the IRS recommends you file a tax return to receive any refunds.
Additionally, some people may have gig work or side hustles during the summer. The IRS offers some reminders:
- Earnings from these activities are taxable.
- Also, if you're paid through payment apps, you might receive an IRS Form 1099-K.
- For more information, see Will You Get an IRS 1099K From Paypal, CashApp, etc.?
You can visit the IRS Gig Economy Tax Center online for more information on how these earnings can impact your taxes. Part-time and seasonal workers can visit IRS.gov or see Who is Required to Fle a Tax Return? for more information.
4. Home improvements
Some homeowners take advantage of the warmer weather to make energy-efficient home improvements. The good news is certain upgrades can provide tax benefits.
If you make qualified energy-efficient improvements to your home this year (or made them after Jan. 1, 2023), you might be eligible for tax credits.
- For example, you may be eligible for the Energy Efficient Home Improvement Credit if you install qualifying upgrades like energy-efficient windows, doors, or heating and cooling systems.
- Additionally, installing solar panels, wind turbines, or geothermal systems can qualify you for the Residential Clean Energy Credit.
Due to the Inflation Reduction Act, these credits, available through 2032, can provide incentives of up to $3,200 for homeowners to invest in energy efficiency. Be sure to keep all receipts and documentation to claim these benefits.
5. Business travel: Tax deduction
Business travel doesn’t stop just because it’s summertime. All year round, tax deductions are generally available for the self-employed and certain other people who travel away from their home or principal place of work for business reasons.
- If you are self-employed and travel for your work, you can generally deduct certain expenses like airfare, lodging, and meals, provided they are necessary and directly related to your business.
- Keeping detailed records of all expenses is crucial to substantiate your deductions.
Familiarizing yourself with IRS guidelines on business travel can help you maximize your deductions and reduce your taxable income. However, if you're uncertain whether you can deduct business travel expenses, consult a trusted tax advisor.
Summer 2024 and your taxes: Bottom line
Staying informed about how these and other activities affect your taxes helps you manage tax liability and potentially save money. Whether it’s keeping receipts for home improvements and travel, filing the necessary forms after a marriage, or claiming credits for childcare, a little planning can also make the next tax season less stressful.
Always consult a qualified tax professional if you have questions about how specific activities may affect your personal tax situation.
Related
-
Berkshire Hathaway's in the 100,000% Return Club. No Surprise HereWarren Buffett's fascination with the insurance industry has helped Berkshire Hathaway's stock return snowball.
-
4 Turnaround Stocks to Consider – and 2 More to Keep an Eye OnA turnaround stock is a struggling company with a strong makeover plan that can pay off for intrepid investors.
-
Tax-Deductible Home Improvements for Retirement in 2025Retirement Taxes Your aging-in-place plan could benefit from the medical expense tax deduction. But watch out for capital gains and property taxes.
-
Don’t Make These Five Mistakes on Your Tax ReturnTax Filing The IRS warns taxpayers to watch out for these common errors as they prepare to file.
-
You Don’t Want to Retire in Portugal: Here Are Three Tax Reasons WhyRetirement Taxes With the NHR benefit retiring and pension taxes increasing, you might rethink your retirement plans in Portugal.
-
Why Abolishing Florida Property Taxes is ProblematicProperty Taxes A bold proposal that aims to eliminate property taxes in the Sunshine State has roused concerns from economists, and rightly so.
-
First-Time Filing Taxes? Key Tax Tips to Know for 2025Tax Filing Preparing your IRS taxes for the first time may seem daunting, but here are some return preparation and filing tips to start.
-
Mail Theft Crisis: Why Your IRS Tax Refund Is At RiskTax Refunds Millions of dollars in tax refunds were stolen in the mail last year. Here's what you should know.
-
Ten IRS Audit Red Flags for Retirees in 2025Retirement Taxes Retirees who think they can escape the IRS audit machine should think again.
-
States with Emergency and Energy Sales Tax Holidays in 2025Sales Taxes Save on appliances with a state emergency preparedness or energy-efficient tax-free weekend in February.
