This summer, taxes are most likely the last thing on your mind, but bear with us! In fact, the summer is a great time to do a mid-year financial review and evaluate your tax status.

Here are some summer tax decisions you can make to save yourself some money come tax season.

1. Organize your finances.

If you’re among those extremely well-organized taxpayers, you’ve undoubtedly already meticulously recorded your income and expenses for the year, marking and filing each and every receipt you’ve received since January. You might even be fully aware of your existing tax situation.

We still have some catching up to do, though, for those of us who aren’t quite as clerically inclined. But don’t worry, getting started isn’t as hard as you would imagine. It just requires a little sorting, discarding anything you don’t need, filing, and updating any financial documentation.

It will be far simpler to deal with the backlog of spending and receipts at this point in the year than it will be to wait until tax season or to hurriedly get organized.

2. Review your income tax withholding.

Now is the time to examine and modify your income tax withholding if you would prefer a different outcome when you file your federal income tax return the following year, regardless of whether you owed money on your return or received a sizable tax refund.

By filling out Form W-4, Employee’s Withholding Allowance Certificate, you can modify your withholdings.

PSA CPA can complete a fresh Form W-4 for you, which you can print and submit to your payroll department, after you respond to a few questions about your income and we’ve taken into consideration any possible tax-free contributions to an IRA, HSA, or anything similar.

3. Keep up with estimated taxes.

You can be required to pay quarterly estimated taxes if you are an owner of a business, participate in the gig economy, or have a sizable income that isn’t covered by income tax withholding. The deadlines are important to note because they are not evenly spaced out throughout the year.

Paying the full amount due in one go at tax time can be more difficult than trying to save up the money for projected tax payments each quarter. At that point, you will also be responsible for paying any relevant penalties and interest for late payments.

Putting the required funds into a different bank account as they come in, or at least once a month, is an excellent method to stay on top of taxes on self-employment and other income.

4. Remember your summer childcare tax benefits.

Because you work away from home during the summer, do you send any children under the age of thirteen to daycare? If so, the Child and Dependent Care Credit might be available to you. The Child Tax Credit is not the same as this.

If your child is cared for at someone’s house, attends daycare, or summer camp (day camps only), you might be qualified for a tax credit to partially defray the cost of childcare. Parents who are not employed but are enrolled in school or looking for work can also be eligible for this credit.

Generally speaking, you cannot use this tax credit to deduct the expense of overnight camp or tutoring. Save any relevant daycare receipts in order to benefit from this credit.

5. Hire your kids.

As long as you go by all applicable labor laws, one benefit of running a business is that you may be able to hire your kids. You can pay them and deduct their earnings if they can assist in any way. Moreover, you won’t have to worry about paying Medicare and Social Security taxes if your children are under 18.

Though they will undoubtedly be in a lower income tax category than you, your children will still need to pay taxes on their earnings. In fact, they might not owe any taxes at all if they are only working a few hours throughout the summer.

6. Make energy-efficient home improvements.

Making home upgrades during the summer can help you save a lot of money on taxes. Homeowners that upgrade their properties sustainably may be eligible for certain tax credits related to energy efficiency.

To find out if your electricity company provides free energy audits, try contacting them. You might also look at low-cost energy-saving strategies for coming fall and winter.

Purchases of energy-efficient products that can generate electricity or control the temperature in your house, including geothermal, wind, or solar heat pumps, may be eligible for a tax credit of up to 30% of the entire cost. This even covers the price of the installation and setup at your house. If you replace your external doors or windows, among other home modifications, you can also be eligible for a credit.

Keep track of and save all relevant receipts so that when tax time rolls around, you may easily complete IRS Form 5695, Residential Energy Credits, to claim your credit. If you e-file with PSA CPA, we can assist you in claiming tax credits for energy efficiency.