Now that Memorial Day has gone by, the unofficial kickoff to summer 2015 is in full swing. The kids will be out of school soon. The weather is heating up. And burgers and hot dogs are hitting the grill for some tasty summertime cookouts and family reunions.
While summer can be an expensive time of year with traveling, summer camps, and less work for those with seasonal jobs, there are plenty of opportunities you shouldn’t overlook to reduce your tax liability. Learn how to enjoy a deductible summer this year with these summer tax deductions:
1. Deducting your summer vacation as a business expense
Are you taking the family on a summer vacation this year? While it may seem far-fetched, there’s a chance you can write off a portion of your trip. If you use some strategic planning, there’s a slim possibility you could deduct the majority of your vacation. The key here is to conduct some type of business when you are away. This might mean meeting with a business partner or a client for a few days while your family spends time getting a tan on the beach. (Of course, you could put on your swimsuit once your work is done for the day.) Eligible expenses you can write off include the cost of a rental car, cab fares, and even lodging. Just remember that you can only deduct the costs you incur for business purposes. If your trip is primarily for business, such as spending 4 days conducting business and 2 days for pleasure, you can deduct most of this trip.
2. Deducting summer day camp expenses
If you’re sending little Albert and Lily to a summer day camp this year, the camp fees you incur may qualify as a tax deduction. These types of expenses can be claimed on your return if you send your kids to a summer camp so that you can either work during the day or look for work. The IRS also offers a Child and Dependent Care Credit that you may be eligible to claim in order to reduce your summer tax bill. This credit is valued at up to $1,050 of the costs for one child under the age of 13 and a maximum of $2,100 if you have two or more children under age 13. For disabled children, the IRS has no age limit on this tax break. While summer tax savings are available on day camps, remember that overnight camps do not qualify for the write-off.
3. Deducting summer job search expenses
If you plan to look for a new job this summer, there is some good news for you. The expenses you incur in your job search may be tax deductible, according to IRS guidelines. Deductible costs include resume writing assistance fees, the cost of using a job website, and even travel expenses to search for or land a new job as you might have to travel out of town for a job interview. Keep in mind that even if you spend money on a job search but don’t actually get offered a new opportunity, the IRS typically allows job seekers to write off their job search costs. A big caveat to this deduction is that any new employment you secure should be in your general industry. There are rules preventing certain expenses to be deducted if you launch a career in a different field.
4. Deducting startup costs for a new small business
Have you always wanted to pursue the American dream by starting a business of your own? The summer may be the perfect time of year to do this if you have more downtime – or if you hold a seasonal job that offers fewer summer hours. While small business ownership is a pricey proposition, there’s a silver lining. You can deduct the startup costs you incur to get your business off the ground. You can deduct up to $5,000 of the costs you incur to officially establish your new business, such as marketing costs to promote a grand opening and fees incurred to train new employees you bring on. Of course, ongoing business expenses are deductible as well once you’ve made it through the startup phase.
5. Deducting charitable contributions
The summer is often a great time to purge by spending some time going through your garage or closets to see what you no longer need to keep. You might have to pitch certain items, but don’t throw out everything because there could be tax savings available. Consider donating certain items to local charitable organizations if they are still in a usable condition. These may include toys, household goods, or electronics. You must donate to a qualifying charity and receive either a receipt or handwritten acknowledgement for your contribution. Be sure to include this documentation with your tax return when filing it in 2016.
To get more summer tax tips, turn to the accountants, CPAs, and enrolled agents at 1-800Accountant today. You’ll be amazed at how much you can reduce your taxes to save more money. Call 1-800-222-6868 or check out ¨üntant.com.
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