TAX RETURNS
The summer activities that could affect your IRS tax returns
Summer was a time for fun, relaxation, and new experiences, but it’s also a season that can have unexpected impacts on your tax situation.
Summer activities can have a significant impact on your tax returns, potentially affecting your deductions, credits, and overall tax liability.
Here are some key summer activities that could influence your IRS tax filing:
Summer camp expenses
If you send your children to summer day camp, you might be eligible for a valuable tax benefit. The Child and Dependent Care Credit can help offset the costs of care for children under 13 years old.
This credit applies to expenses related to childcare that allows parents to work or look for employment. To take advantage of this credit:
- Keep detailed records of camp fees
- Ensure the expenses meet IRS eligibility requirements
- Note that overnight camps do not qualify for this credit
Business travel expenses
Summer doesn’t put a halt to business travel, and these trips can have tax implications for self-employed individuals and certain employees. If you travel away from your home or principal workplace for business reasons, you may be able to deduct certain expenses:
- Airfare and lodging costs
- Meals (subject to certain limitations)
- Ground transportation
It’s crucial to maintain thorough records of all business-related expenses to substantiate your deductions. This includes keeping receipts and documenting the business purpose of each trip.
Part-time and seasonal work
Summer often brings opportunities for part-time or seasonal employment, especially for students. Here are some tax considerations for summer jobs:
- Even if you don’t earn enough to owe federal income tax, filing a return may be beneficial to receive any refunds due
- Earnings from gig work or side hustles are taxable
- Self-employed individuals (e.g., babysitters, lawn care providers) must report their income
For those engaged in the gig economy, it’s important to be aware that you might receive a Form 1099-K for payments received through apps like PayPal or CashApp.