It's that time of the year where the hustle and bustle slows down and we can finally take a moment to enjoy what we have worked so hard for all year long. It's also the time of the year that some of your tax planning may slide, so here are some fun Summer Tax Tips to keep in mind while you work and play.
Summer Camp
Is your child enrolled in a Summer Day Camp? You may be eligible for a tax credit. Many working parents must arrange for summer care for children 13 years and younger. Unlike overnight camps, the cost of day camp may count as an expense toward the Child and Dependent Care Credit.
Summer Cleaning
Summer Cleaning could earn you a tax deduction, as long as you donate items in good condition to a qualified charity. Remember to itemize your deductions and keep proof of all of your donations.
Summer Home
Buying a home this summer? First time home buyers get a credit of up to $8,000 (first time home buyers are those that haven't owned a house in the past 3 years). This credit is good for houses purchased prior to December 1st, 2009.
Summer Job
Any working students at home for the summer? Some things to keep in mind are what status they are employed as and if they will be exempt from withholding. Summer workers are sometimes misclassified as independent contractors (self-employed) rather than as employees. Employers who do this usually fail to withhold taxes from the worker's wages, often leaving the worker responsible at tax time for paying income taxes plus Social Security and Medicare taxes. Pay close attention to this so there are no surprises come tax time. Your working students also may be exempt from withholding if they are claimed as a dependent, their total 2009 income is not over $5,700, or they had no income tax owed for 2008. Feel free to call us at MB Tax Professionals with any tax questions for your working student.
Summer Road Trips
Buying a more fuel efficient car just in time for those long summer road trips? You may be eligible for a tax credit up to $1,800 depending on the make and model just for changing what you drive.
Enjoy your summer and let us know how we can help make 2009 your smoothest tax year yet. Looking forward to working with you soon!
