Summer Tax Tips for Everyone

Summer is usually the time for relaxing, but it can also be a time for tax savings, especially if you’re still reeling from an unexpectedly large tax bill in April. Here are four timely tips:​

Rent your home. If you rent out your main home or a vacation home part of the time, you may be entitled to deductions like other landlords. This includes the rental-related portion of mortgage interest, property taxes, repairs, utilities, and insurance. Keep in mind, if your personal use exceeds certain limits, you can’t deduct a loss. And if you rent for less than 14 days, the rental income is tax free!

Send young kids to camp. Depending on your situation, you may be able to claim a Child and Dependent Care Tax Credit for the cost of sending children under age 13 to summer day camp. However, the cost of overnight camp doesn’t qualify for the credit.

Hire your child. If you have an older child looking for employment this summer, hire them to work for your business. Reasonable wages are deductible by the business and your child will likely owe little tax, if any, on the earnings. Plus, they may be eligible for other employee benefits.

Take a business trip. Spend some time seeing a different city this summer while you're on a business trip. When you travel for business, you can generally deduct expenses — including airfare, lodging and 50 percent of the cost of meals — attributable to the business portion of the trip. But you must spend more time on business matters while you’re away than you do on sightseeing or other personal activities.

Leverage a child's earned income. If you have a young worker who earns money from mowing lawns or babysitting, be sure to keep track of their earnings. While they will probably earn too little to pay tax, this earned income allows the young worker to open a Roth IRA. You could even decide to gift money into the account as long as it's less than the earned income amount.

Finally, summer is a great time to create a full-year tax projection. Use this information to determine if the steps you're taking now will help you avoid a large tax bill at the end of the year. Call today to schedule a review of your situation to help manage your full-year tax bill.

"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.  
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at [email protected]. 
 
For more free resources, such as Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Mia Verc, CPA;  Janice Papais, CPA