Tax Tip: 5 Summer Activities That Could Change How Much You Owe Next Year
There are a slew of overwhelmingly popular activities and events that are enjoyed during the summer months, and marriage is one of a few that have consequences for how much you may owe when you file your individual income tax return next year. Summer is the second favorite season to get married for couples, behind fall. Taken together, 79% of Americans get married between May and November, according to The Knot, with weddings peaking in June and September.
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In its latest Tax Tips article, the IRS has identified five popular summertime activities, including getting married, that could change your tax planning come tax season 2024.
1. Kids Summer Camp
For many kids, summer is nothing without summer camp. For parents or guardians, sending kids to camp this summer involves figuring out if registration costs can be claimed as a Child and Dependent Care Credit if they meet all the tests outlined in IRS Publication 503. You can claim care expenses up to a maximum of $3,000 for one person or $6,000 for two or more individuals.
2. Home Improvements
Summer is the choicest time for starting projects around the house or finally finishing old ones. Those planning energy-efficient renos this year may qualify for an Energy Efficient Home Improvement Credit up to $3,200. Qualifying improvements include exterior windows and doors, heating and AC installations and water heaters. Geothermal power generation, solar and wind installations are covered under the Residential Clean Energy Credit.
3. Marriage
As mentioned above, a large majority of American couples choose the warm weather months to tie the knot. Marriage is a major life change in the eyes of the IRS and can bring financial benefits and hindrances for newlyweds. Accordingly, the IRS recommends that as soon as you say “I do,” send all name changes to the Social Security Administration and address changes to the IRS, the USPS and any employers. You’ll need to fill out Form 8822 to change your address.
4. Part-Time Work and Side Hustles
As the IRS points out, any worker earning money from seasonal work, the gig economy, a side hustle or a part-time job this summer should file an income tax return, regardless if they made less than the filing threshold or if it was reported to them on a Form 1099. If you get paid through a third party — for example, if you work for a drive-sharing company like Uber or Lyft — you may get a 1099-K when you surpass the $600 earnings reporting threshold. Check out the Gig Economy Tax Center page for information on how your taxes will be affected by reporting part-time and gig work.
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5. Business Travel
Depending on what the IRS calls your “tax home” — “the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home” — you can claim temporary (not indefinite) travel expenses, including transportation, shipping, mileage and rental car costs, lodging, meals and business calls, within the conditions outlined in Topic No. 511 on the IRS site.
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This article originally appeared on GOBankingRates.com: Tax Tip: 5 Summer Activities That Could Change How Much You Owe Next Year
