Summer Activities Which May Affect Next Year’s Tax Return
By this time, summer vacation planning is in full swing. The last thing you are thinking about is next year’s tax filing season. However, there are some common summer activities which may impact your tax return come next April. The following tips may help make next filing season go smoothly.
- If you have gotten married this year, take the following steps now to avoid tax return issues next year.
-If you have changed your name, contact the Social Security Administration to register the name change.
-If your address has changed, notify the IRS by filing IRS Form 8822.
- Summer Day Camp: The tax laws provide a credit for child and dependent care expenses. In order to qualify for the credit, the dependent child must be under the age of 13 and the expense has to have been incurred so that you or your spouse, if filing jointly, can work or look for work. The cost of summer day camp may be eligible for the credit if you meet the requirements. You will need to include the name, address and identification number of the care provider on your tax return along with the amount spent in order to claim the credit. Therefore, it is important that you retain this information.
- Business Travel: If you have a business trip planned and think it would also make a great family vacation, you will have to keep good records regarding your travel expenses and activities and have these available at tax time. Only the expenses which are business related are deductible. You may have to pro rate the expenses incurred between business and personal. The rules for travel within the United States are different from the rules for travel outside the United States. None of the expenses incurred by your family would be deductible.
- Part-time Work: You may have picked up a part-time job or your teenage children may be working a summer job. It is possible that the amount earned from the job is not sufficient to trigger an income tax liability. However, it is important that a return be filed in order to claim a refund for the income tax that was withheld from the income. If the income was received through a payment app, you may receive a 1099-K next year.
- Home Improvements: In preparation for the summer season you may have purchased a new air conditioner or fortified your home with new windows and doors. Or you may be looking to make these home improvements this summer. If so, be aware that these improvements may qualify for the energy efficient home improvement credit. If so, you want to make sure you have the documentation for the purchase available when you prepare your return next year. For more information on the credit see: https://magdaabdogomezlaw.com/home-energy-credits/