The school year is well underway, and while summer is over- there are certain summer activities which can affect your financial situation. Many people use the summer to get married, go on vacation, send kids to camp and work part-time at a seasonal job.
While your summer may be filled with sunshine and fun, different activities or changes you make during the summer might have impacts on your taxes when you file the following April. Here are just a few things that could affect your finances and tax return.
We’ve covered this before, but if you get married at any point in the year, your filing status will change. While many are aware of the tax incentives that come with marriage, fewer are aware that marriage can also lead to a tax penalty. If you got married this summer, consider the impacts on your taxes and follow the tips below to avoid running into tax trouble.
- Select your filing status: After you get married, you will need to change your filing status. You and your partner will either need to file Married Filing Joint or Married Filing Separately.
- Change your name: You will also need to report any name changes to the Social Security Administration.
- Prepare for the marriage tax bonus or penalty: Your spouse’s income could affect whether you receive a marriage penalty or bonus on your taxes. Generally, you can expect a penalty if you have equal incomes and a bonus if you have disparate incomes.
- Update your change of address: If you move, you will need to report the address change to the postal service, your employer and the Internal Revenue Service (IRS). If you’re also a new homeowner, you may be able to deduct your mortgage interest at tax time.
Reaching out to a tax attorney at Polston Tax and having them handle your tax preparation can simplify the process for you and ensure everything’s handled correctly.
Sending Your Kids to Summer Camp
A popular summer activity is sending your kids to summer camp to learn new things and meet new people. While it greatly benefits your kids, sending your kids to day camp can also benefit you financially. The cost of summer day camp could count towards the child and dependent care credit.
If you paid a daycare service, a summer camp or a babysitter to care for a qualifying child under 13 years, you could qualify for a tax credit of up to $3,000 for one child or up to $6,000 for two or more dependents.
Keep in mind that you can also claim the child tax credit worth up to $1,000 for each qualifying child. This credit can lower your tax liability, and you may qualify for another tax credit if you are a working parent. At Polston Tax, we can help you determine what tax credits may apply to your situation.
Did you or someone in your family work a part-time job this summer? While you might have not earned enough to owe federal taxes, you still need to file a federal return. If you have taxes withheld in your paychecks, you may be due a refund. You should receive a W-2 Form from your employer that will account for the income you received from that job.
If you earn a moderate or low income, you may be able to claim the Earned Income Tax Credit (EITC). This credit may increase your refund and lower the amount of taxes you owe. At Polston Tax, we can help you with tax planning and evaluate your finances.
Get Tax Tips and Resolution Services From Polston Tax
Still unsure how your summer activities may affect your taxes come tax season? Polston Tax Resolution & Accounting can help. We have helped taxpayers make sense of their tax situations, including owing back taxes, since 2001. We established our first office in Norman, Oklahoma, and have expanded to five offices to assist clients across the nation. We offer services to help you with your back taxes, and our full-service tax and accounting firm also provides:
- Tax preparation
- Advanced tax planning
- Small business tax and accounting
- Cannabis tax planning and accounting
- Negotiating tax resolutions like offers in compromise, installment agreements, levy releases, penalty abatements and revenue officer assistance
Our team of more than 100 tax attorneys, tax preparers, CPAs, accountants and case managers can help you develop a customized strategy to provide you with the tax help you need. Contact us at Polston Tax to learn more about how we can help you with your taxes.