While it is tempting to take a break from everything this summer, you may regret putting off tax planning once tax season comes. Now is the time to review your tax plan and make effective changes while you still can. Keep your head in the game even when your feet are in the pool with the following tips:
Consider putting children on the payroll during the summer months if you are a sole proprietor. Social Security and Medicare taxes do not apply to wages paid to your children under age 18. In addition, until they turn 21, their earnings are not subject to federal unemployment tax.
Sending your children to summer camp might earn you a deduction if employing them is not an option. Summer day camp expenses for kids under 13 can provide a tax credit of up to 35 percent, but remember, overnight camps do not qualify. To claim this credit usually it is a requirement that both parents are working.
Tax deductions for moving have been limited. Recent tax code changes have eliminated the deduction for moving expenses. While this means most taxpayers will no longer be able to deduct moving expenses, there are exceptions to the new rule. Give us a call if you have questions about this change.
Business and pleasure can mix – if you follow the rules. If you want your business travel to remain tax deductible, and you are considering adding on a few fun days before or after a business trip, make sure you follow all the rules. A tax deduction may also be available for travel that is primarily for charitable work.
Regardless of your summer plans, this is always a good time for a general tax checkup to ensure your withholdings and estimated tax payments are on point. Contact our office if you need to schedule a midyear tax planning consultation.
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