With the bright summer sun and the warm temperatures, this period of the year is usually characterized by fun activities and making memories. However, some of these fun activities can earn you tax credits and refunds on your IRS tax return, saving you money!
Part-time work
Part-time work during the summer is popular amongst teenagers and young adults. And although they don’t earn enough to pay taxes, filing tax returns is still recommended, to ensure they get any refund they may be qualified for.
Additionally, taxpayers who work part-time or have a summer income, whether physically or online, must visit the Gig Economy Tax Center to understand how taking part in the gig economy can affect their taxes. This includes taxpayers who earn via a digital platform and those who are paid in any form—cash, goods, property, or virtual money. Those who are paid via payment apps may receive an IRS Form 1099-K.
Business travel
Unlike kids, parents don’t take the ‘season off’ during summer as business deals happen all year round. Hence, taxpayers who go on business trips may qualify for deductions on travel expenses and lodging costs. However, these deductions do not apply to extravagant expenses or money spent for personal purposes. Stay updated on your business travel deductibles, and keep a detailed record of your trip to support your claims when you return.
Summer Camp
For some families, summers include activities like camping that keep the kids occupied while school is out. If you send your child to a summer camp, you may qualify for the Child and Dependent Care Credit. However, your child (or dependent) must be younger than 13 years old.
Marriage
Beautiful nuptials aren’t left out of the thrill of summer. However, you can make tax filing easier for you and your spouse, and even accrue done benefits if you do the following:
- Report any change of name to the Social Security Administration (SSA) to avoid discrepancies in their records and your tax returns. This prevents delays in processing your returns and issuing refunds if you qualify for tax credits.
- Notify the United States Postal Service, employers, and the Internal Revenue Service (IRS) of any address change. Newlywed taxpayers who wish to officially change their mailing address with the IRS must complete and submit Form 8822, Change of Address.
Home improvements
Most home upgrades and home improvements take place during summertime. The IRS has made it possible for taxpayers to earn potential tax benefits on some of those improvements.
According to the IRS, taxpayers who make qualified energy-efficient improvements to their homes after January 1, 2023, may qualify for a tax credit of up to $3,200 and can claim the credit for improvements made through 2032.
The home improvement credits covered under this tax credit include:
- Energy Efficient Home Improvement Credits that cover exterior windows and doors, water heaters, and heating and air conditioning installations.
- Residential Clean Energy Credits that cover renewable energy home improvements. This includes solar water heaters, fuel cells, and battery storage or solar, wind, and geothermal power generation.
