As the summer season kicks off, many people engage in various activities that can have significant implications for their tax returns. Gil Pocker, our experienced Enrolled Agent at Scout Tax, is here to shed light on these activities and provide expert advice to help you navigate the potential tax implications. At Scout Tax and Scout Industries, we are dedicated to offering comprehensive tax and financial solutions. Consequently, this ensures our clients are well-prepared for the next tax season.
1. Getting Married
Summer is a popular time for weddings. Newlyweds should report any name change to the Social Security Administration and any address change to the United States Postal Service, their employers, and the IRS (Internal Revenue Service). This ensures that they receive important documents needed to file their taxes. Additionally, properly managing these changes will ensure a smooth transition come tax season. Newlyweds may also want to consider adjusting their withholding to reflect their new marital status.
2. Sending Kids to Summer Day Camp
For parents, the cost of sending children to summer day camps (but not overnight camps) may count towards the Child and Dependent Care Credit. This credit can help offset the cost of childcare while you work. Our experts at Scout Tax can help you determine if your summer camp expenses qualify for this credit.
3. Working Part-Time
Many people, especially students and teachers, take on part-time jobs during the summer. Even if they do not earn enough to owe federal income tax, they should still file a return to get a refund for taxes withheld from their checks. Understanding your filing requirements will help you maximize your refund. Normally, employees receive a Form W-2, Wage and Tax Statement, from their employer to account for the summer’s work. Part-time workers should also be aware of their potential eligibility for the Earned Income Tax Credit (EITC).
4. Gig Economy Work
Summer often provides opportunities for gig economy work, such as ride sharing, delivery services, and other on-demand jobs facilitated through digital platforms. Income earned from these activities is taxable, and it is crucial to understand how participating in the sharing economy can affect your taxes. Our team at Scout Tax is here to provide personalized advice on managing your gig economy income. Workers in the gig economy should track all income and expenses to ensure accurate reporting.
5. Home Improvements
Summer is also a popular time for homeowners to embark on home improvement projects. Some home improvements can potentially increase your home’s value and affect your property taxes. Additionally, certain energy-efficient upgrades may qualify for tax credits. Keeping detailed records of these improvements can help when it is time to sell the home.
6. Renting Out Your Home
With the rise of short-term rental platforms like Airbnb, many homeowners opt to rent out their homes during summer vacations. Renting out your home can generate extra income, but it also has tax implications. The IRS requires you to report rental income and may allow you to deduct certain expenses. Make sure to keep track of all rental income and related expenses for accurate tax reporting.
7. Moving for a Job
Summer is a common time for people to relocate for new job opportunities. If you moved to take a new job, you might be eligible to deduct certain moving expenses. The rules around these deductions have changed in recent years, so it is crucial to understand what you can and cannot deduct. Keep all receipts and documentation related to your move.
8. Volunteer Work
Many people use their free time in the summer to volunteer for various causes. While you cannot deduct the value of your time, you may be able to deduct certain expenses related to volunteering, such as mileage. Knowing how your charitable contributions and volunteer expenses can affect your tax return is beneficial. Always keep detailed records of your expenses to ensure they are deductible.
Navigate Summer Fun with Confidence
Summer activities can be enjoyable and fulfilling, but they often come with tax implications that should not be overlooked. At Scout Tax and Scout Industries, we are committed to helping you understand these implications and make informed decisions. Whether it is income from a summer job, rental income, home improvements, or childcare expenses, our team is here to provide expert guidance. Contact Gil Pocker, our Enrolled Agent, today to ensure you are well-prepared for the next tax season. Visit Scout Tax and Scout Industries for more information and to schedule a consultation. Enjoy your summer with peace of mind, knowing your tax affairs are in good hands!
