Summer is here. And with it come a ton of expenses! Be it vacations, tours, cruises, camping trips and so on. But summer break isn’t in vain, you don’t have to spend without a few benefits.
So, if you haven’t planned your family getaway yet, get planning right away. Because some of the costs and expenses you incur during your summer vacation can be deducted from your income tax for the year? But if you rather save and learn a lot more about tax benefits for summer expenses, here are a few that you and your family can enjoy this summer.
Check if you’re eligible
Want to claim some summer credit? You need to have proof of income for the year. If there is no account of an income earned during the year, then you won’t be able to file for a claim.
Summer day camp expenses
If you’re worried about childcare expenses this summer, take a deep breath, because you can claim credit for the same. Phew! But, conditions apply, of course, the child has to be below 13 years old and an overnight stay in the summer camp is not tax-deductible.
So go ahead and claim a tax break if you have to pay someone to care for your children this summer.
Check your paperwork
If you’re eligible to earn a credit verify all your paperwork.
Ensure to attach a federal form 2441 to a federal form 1040, Federal Form 1040A, or Form 1040NR. However, this rule is not applicable for stay-at-home parents. So, if you are unemployed, you will not be able to claim credit for child care expenses.
Upon filing tax claims for child care summer expenses, you will be required to provide your child’s Social Security number. Make sure that you have this information in handy when preparing your taxes.
Summer rental income
Do you have a summer home or vacation property, such as a house, apartment, boat, mobile home, or similar property? You can rent it out for up to 15 days a year without having to pay taxes on the rental income. You can even deduct qualified expenses for the rental home on Schedule A of your tax return. If you paid mortgage interest on your second home, remember that it is a deductible expense.
The right summer camps
Do your research on summer camps before you send your children to them. The right summer camp will give you two benefits, one being, your child is safe and having fun while you’re at work and the other being, you can claim credit for summer child care benefits.
However, a summer camp care provider cannot be your spouse or a dependent. But a son or a daughter over age 19 years, who lives independently is an eligible care provider. But before you claim your benefits, you must declare the care provider’s name, address and tax ID number.
Know which expense qualifies
Knowledge is power! (Subtle ‘Game of Thrones’ reference) What we’re trying to say is that not all expenses spent for summer camp qualify for a tax credit. So be aware of the specific items you can deduct and spend accordingly. For example, food, clothing and fuel expenses as you drive your child to the summer camp don’t count. But fees paid to the care provider qualifies as a deductible expense. You can claim up to $3,000 credit for one child and up to $6,000 if you have two or more kids.
Taxes and yard sales
Having a garage sale or yard sale this summer, don’t worry about taxes! These sales are generally tax-free because your used items are sold for much less than what you bought them for. Apart from that, taxes are owed only if you sell valuable collectibles. Check out Beem to file your federal and state taxes without any hidden charges and get the maximum refund.