Vacations and relaxation are definitely the highlights of summer. But it can also be the perfect season to get ahead on your tax strategy. With a few proactive steps, you can streamline your future tax burden. It’s all about making the most of these seasonal opportunities!
Make the Most of Summer with These Tax-Saving Strategies
Even as you unwind in the warmer months, there are a number of simple but effective steps you can take to plan ahead and reduce your taxable income. These ideas can help trim this year’s tax liability and set you up for easier filing next spring.
1. Consider Renting Out Your Property
Do you have a beach house or another property in town? Renting out your property can generate income and also come with potential deductions. If you rent for more than 14 days, a portion of your mortgage interest, property taxes, insurance, utilities, and repairs connected to the timeframe of the rental may be deductible. On the other hand, if your rental stays under the 14-day mark, the income may be completely tax-free—no reporting required!
2. Get a Tax Credit for Summer Day Camp Costs
If your kids are enjoying a day camp this summer, keep those receipts. For qualifying families, the cost of day camps—not overnight camps—can be counted toward the Child and Dependent Care Credit. It’s a helpful way to turn childcare into a tax perk. You just need to make sure your child is under 13. The camp also needs to relate to you working or looking for new work.
3. Employ Your Teen in the Family Business
Have a teenager eager to earn some money? Consider hiring them to help in your business. As long as their pay is reasonable and tied to actual work performed, you may be able to deduct their wages as a business expense. In most cases for summer work they’ll owe little to no income tax on what they earn.
4. Combine Work and Travel
Sometimes, summer travel plans and work can go hand in hand. If you travel primarily for business reasons, many of your expenses may be tax-deductible. That means airfare, hotel stays, and a portion of your meals can all be tallied up for a deduction. Just make sure the business portion of the trip outweighs the leisure side. You’ll also want to keep documentation to back up your time spent away from home and the office.
5. Set Up a Roth IRA for Your Child’s Summer Job
Whether it’s through babysitting, dog-walking, or mowing lawns, your child can benefit from a Roth IRA if they have earned income. Even if they don’t make enough to file a tax return, their earnings can still qualify them to open an account. You can help kickstart their retirement savings with a gift up to the total amount they earned. It’s a smart way to turn summer work into a long term financial benefit.
Get a Jump Start on Tax Season—Start Planning Now!
Being the midpoint of the year, summer is a great chance to take a look at your tax projection. Do you know whether you’re on track for your anticipated tax liability? Or will you be headed into a surprise for April? You might need to adjust your withholdings or rework your estimated payments. Acting now can save stress later.
At NSO & Company, we’re here to help you use every season to your advantage. From seasonal tax tips to full-year planning, our team is ready to guide you toward better financial outcomes. Let’s turn this summer into your smartest tax season yet. Reach out today to schedule your summer tax review!