Summer Tax Tips
By Greenstein, Rogoff, Olsen & Co., LLP
Most of us don’t like to think about taxes during the summer, but a little planning now will help you relax later. If you planned a summer vacation, had a summer job or sent your kids to camp you should be aware that some of these summer activities may qualify you for tax benefits. However, there are also some key tax issues that must be handed correctly now to avoid problems later.
Here are a few key tips from the IRS that will help you avoid problems and lower your taxes:
1. Get tax credit for summer day camp expenses - Who would have thought camp could generate tax savings! If you sent your child, 12 years old or younger, to a day camp, the cost may count toward the Child and Dependent Care Credit. Keep in mind your child must be at camp while you are working or looking for work.
2. Clean your home and get tax benefit - Those unused items that you found during your summer/spring cleaning can be donated to a qualified charity and generate some tax deductions. Keep in mind that you need to collect all receipts and have proof for all donations. To qualify to deduct your charitable contributions you also need to itemize your deductions on Schedule A.
3. Rent your home while generating no taxable income – Do you have a house close to the coast or a hot tourist attraction? If you rent your home for up to 14 days per year, that rental income is typically not taxable.
4. Summer workers, students may be exempt from tax withholding - If you got a refund for all your 2010 taxes withheld you may claim ”exempt” on your Form W4 when you are hired. This action will possibly let you avoid having to file 2011 federal tax return.
5. Be energy efficient and get credit on your 2011 Tax Return - Do not forget about the tax credits that are available on installation of windows, doors and cooling systems of up to $1,500. To find out more click here.