Summer is a time for fun but don’t forget to consider a few items that may have implications come tax time. Below are some activities and guidelines on how taxpayers can take advantage of tax savings during the warmer months.
Marriage
While love may be in the air during Spring, Summer is wedding season. Newlyweds can make their tax filing easier by taking two simple steps now:
- Report any name change to the Social Security Administration.
- Notify the United States Postal Service, employers and the IRS of any address change. To officially change their mailing address with the IRS, taxpayers can either complete and submit Form 8822, Change of Address or simply file your next tax return using your new address.
Summer day camp
If you are sending a child to summer day camp, the cost may count toward the Child and Dependent Care Credit. Keep in mind that camps cannot be overnight to be considered qualified costs.
Business travel
Tax deductions are available for certain people who travel away from their home or main place of work for business reasons. Whether a business traveler is away for a few nights or all summer long, it’s important for them to remember the tax rules related to business travel.
Part-time work
While summertime part-time workers may not earn enough to owe federal income tax, they should file a tax return to get any refund they may be owed. Part-time and seasonal workers can visit IRS.gov to learn more about who should file a tax return.
Some taxpayers earn summer income with a side job or gig work. They can visit the Gig Economy Tax Center at IRS.gov to learn how participating in the gig economy can affect their taxes. If you are paid through payment applications for goods and services during the year, they may receive an IRS Form 1099-K for those transactions. For more information, go to IRS.gov/1099k.
Home improvements
You may be able to take advantage of tax credits for home improvements. If you make qualified energy efficient improvements to their home after Jan. 1, 2023, you may qualify for a tax credit up to $3,200.
The following credits may apply to you:
- Energy Efficient Home Improvement Credits for things like water heaters, exterior windows and doors and heating and air conditioning installations.
- Residential Clean Energy Credits are available if you install solar water heaters, fuel cells and battery storage or solar, wind and geothermal power generation.
