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How Your Summer Plans Could Impact Next Year’s Tax Return

by | May 1, 2024 | Gig Workers, Tax Credits and Deductions, Tax planning, Taxes | 0 comments

Let’s be honest – tax preparation isn’t at the top of anyone’s summer to-do list. But consider this! When planning fun summer activities or making life changes, it may be helpful to keep in mind how they may affect your tax return the following year.

Summer tax tips you need to know

Here are five circumstances in which your summertime activities may result in tax deductions or have an influence on the taxes you will (or will not) owe during tax season:

  1. You’re getting married this summer.

Summer is wedding season, and if you’re getting hitched, remember these tips:

  • Name changes: Married couples should notify the Social Security Administration and their employer, if necessary of any changes to their names. To avoid delays in submitting your tax return next year, be sure your name matches your Social Security number. You may learn more about reporting a name change online or by calling 800-772-1213.
  • Change of address: If you relocate, notify the IRS of your new address by completing Form 8822. This ensures you will receive any important tax letters.
  • Adjustment of Tax Withholding: Getting married changes your filing status and might alter your tax bracket. It’s a good idea for newlyweds to review their Form W-4 and modify their tax withholding as necessary, especially if they both work or have dependents.
  1. You plan on sending your child to a summer day camp.

This summer, sending your children to day camp could qualify you for a tax credit.

The Child and Dependent Care Credit, one of the tax advantages available to parents, can be claimed if you hired someone to care for your kid while you worked or looked for a job. This includes day camp expenses (night camps are not eligible), babysitter or daycare fees, pre-school tuition, and so forth. So, if you enroll your kids in day camp, keep track of any expenses you pay.

To be eligible for this tax credit, you must have earned money during the tax year, and your child(ren) must be under the age of 13.

  1. You’re earning income from a side gig.

Summer side-hustles can be a terrific way to supplement your income, but keep in mind the tax ramifications of working in the gig economy.

If you are self-employed, such as an independent contractor or freelancer, and earn taxable income that is not subject to withholding, you are obligated to file estimated taxes with the IRS. If you offer products or services through online marketplaces or payment applications, make sure you’re familiar with the new reporting requirements which came into effect in early 2024.

  1. You’re working a part-time job.

If you are a seasonal worker taking on a part-time job this summer, you may not make enough money to pay federal income taxes. Even if you don’t expect a tax bill, you should remember to submit a return next year – and early! This will guarantee that your tax refund reaches your bank account as soon as possible.

  1. You filed a tax extension this year.

This is more of a reminder, but if you sought a tax extension this year to provide additional time to finish your return, be sure to file your income tax return as soon as possible. It’s usually better to file while the previous year is still fresh in your mind than to wait until the end of the year.

This year’s tax extension deadline is not until October 15, 2024, however we encourage you to submit this summer if you can!



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