Don't take a vacation from tax planning
Don't ignore your opportunity
to save on taxes just because it's summertime. Here are some summertime tips to
keep your tax plans going.
If you are a sole proprietor
with children, you might consider putting them on the payroll during the summer
months. Wages paid to your children under age 18 are not subject to social
security and Medicare taxes. What's more, their earnings are not subject to federal
unemployment tax until they turn 21.
If employing your children is
not an option, you might still be able to score a deduction by sending them to
summer camp. Day camp expenses for kids under 13 can provide a tax credit of up
to 35%. Just remember, overnight camps do not qualify, and child-care must be
necessary to allow the parents to work.
Summer is also a common time
for home selling and moving, so be on the lookout for deductions related to
these activities. Carefully file away all home sale or purchase papers for next
year's tax filing. If your move is job-related, there is the potential for
additional deductions if you meet the 50 miles or more test.
Perhaps your sights are set instead on some leisure travel. Tacking on a
few fun days before or after a business trip might be a tax (and cost)
efficient way to pay for a vacation –
if you follow all the rules. Travel that is primarily for charitable work might
also qualify you for a tax deduction.
And finally, no matter what
your summer plans are, this is always a good time for a general tax check-up to
ensure your withholdings and estimated tax payments are on target. For
assistance with any of these issues, contact our office.
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