Summer's a Time for Vacation and Tax Planning
It's tempting to take a break from everything during summer, but you may regret it next year if you push off tax planning. Here are some tips to help you keep your head in the game, even when your feet are in the pool:
If you are a sole proprietor with children, consider putting them on the payroll during the summer months. Wages paid to your children under 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 kids 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 usually both parents must work to claim this credit.
Keep in mind that tax deductions for moving have been limited. The recent tax code changes have eliminated the moving expense deduction. That means most taxpayers will no longer be able to deduct moving costs such as packing/ shipping, travel, and lodging. There are a few exceptions to this rule, so give us a call if you'd like to discuss details.
Business and pleasure do mix- if you follow the rules. Perhaps your sights are set 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. But, you have to follow all the rules if you want your business trip to remain tax deductible. Travel that is primarily for charitable work may also qualify you for a tax deduction.
No matter what your summer plans are, this is always a good time for a general tax checkup to ensure your summer withholdings and estimated tax payments are on target. For help with any of these issues, contact our office.