Now that the April filing deadline has passed, most people are happily shifting their focus from taxes to summer vacations. However, summer is actually a great time to review your withholding and see how your warm-weather plans might affect your tax return next year.
If this feels overwhelming, don’t worry. We’re here to help! At Neely’s Accounting Services, we want you to enjoy your summer AND set yourself up for financial success. We’ve compiled some common summertime tax situations and tips to help you stay prepared stress-free.
Summer Wedding = Tax Implications
Getting married? Congratulations! Enjoy your wedded bliss while you add a few important items to your to-do list. If you have name or address changes, it’s important to report it to the appropriate entities. Alert Social Security Administration of name changes and update your address with the United States Postal Service, your employers, and the IRS. To change your address for federal tax purposes, simply complete Form 8822, Change of Address, and send it over to the IRS. This way, you’ll make sure to receive all the necessary documents for filing your taxes smoothly.
Day Camp for Kids = Possible Tax Credit
If you’re sending your kids to summer day camp, it’s good to know that unlike overnight camps, the cost of summer day camp may count towards the child and dependent care credit. That means you could potentially get a nice tax credit to help with those expenses.
Part time Work = Filing a Return
Are you working part-time during the summer? Even if you don’t earn enough to owe federal income tax, don’t forget to file a return. Filing early next year will actually allow you to get a refund for any taxes withheld from your paychecks this year. It’s like a little bonus!
Seasonal Work = W2s
Ah, the gig economy! If you’re earning some extra cash this summer by providing on-demand work, services, or goods through digital platforms like apps or websites, we’ve got some great news. You can head over to the Gig Economy Tax Center at IRS.gov to learn more about how participating in the gig economy can affect your taxes.
Employees usually receive a Form W-2, Wage and Tax Statement, from their employers to keep track of their summer work. You’ll need this form when preparing your tax return, and you should expect to receive it by January 31 next year. And remember, if you’re an independent contractor, you won’t have taxes withheld from your earnings, so you’ll be responsible for paying your own income taxes, as well as Social Security and Medicare taxes. Even if you’re no longer working for your summer employer, they should still send you the W-2 so you (or your local CPA) can prepare your taxes properly.
Tax Extension = More Time to File
For those of you who requested an extension or missed the April deadline, you still have a chance to file your return. If you’re not sure where to start, reach out to us! Our individual services are tailormade to help you fight disorganization and overwhelm and get your taxes filed correctly and on time. And we’re local, which means we’re always available to help answer questions and guide you through the process. Which leaves you more time to enjoy your summer.
Adjust Withholding = Avoid Surprises
Avoid a tax surprise next filing season by reviewing your withholding now. Life events like marriage, divorce, having a child, or changes in income can all affect your taxes, and you’ll want to be prepared before tax time next year. If you need help determining how much withholding is best for you, give us a call. Our friendly, Roanoke CPAs are standing by to help.
Let Neely’s take the stress out of preparing for tax season! Our clients have trusted us with their personal income tax needs since 2007 because we deliver big-city service with hometown values. Contact us today and let us set yourself up for tax time success.