Summertime Tax Tips

Summer is the season of leisure. It's the time of year when everyone wants to kick back, relax and enjoy the sunshine. However, while everyone's busy enjoying themselves, it's easy to forget that there are still important tax-related matters that need attention. In fact, there are several opportunities during the summer months to make smart financial decisions that can result in big tax savings. In this post, we'll be sharing essential tax tips for making the most of your summer.

Make the most of tax-free events

Summer is filled with exciting events and activities that could be tax-free. For instance, if you attend a charity walk/run, bike race, or even a music festival, keep the receipts and consider claiming the tax deduction. For these activities, you can claim the charitable donations that are made to the organization as a tax write-off. However, be sure to keep good records of your donations to ensure that you get the deductions you deserve.

Plan your charitable donations

During summer, most people hit the pause button on charitable contributions, saving them for the holiday season or the end of the year. However, planning your donations earlier in the year can significantly benefit you come tax time. The IRS allows taxpayers to claim charitable deductions up to 60% of your adjusted gross income, so plan accordingly.

Check on your withholding and estimated payments

The mid-year mark is a perfect time to review your estimated tax payments and withholdings, so you aren't caught short of taxes come tax season. Withholding is the amount of income that your employer or withhold an employee's paycheck for taxes purposes. On the other hand, estimated payments are typically how you pay taxes on income that isn't automatically taxed, such as freelance income.

Use your summer work expenses to your advantage

If you work extra hours or take on additional work during the summer, it's beneficial to save all your receipts and track your expenses, particularly those that are work-related. These expenses might include job-hunting fees, travel expenses, or even the cost of equipment used for your new job. Keep all your receipts and document everything as proof of your expenses so you can claim credit on your taxes.

Take advantage of summer energy credits

Summer is the perfect time for energy improvements like installing solar panels for your home or purchasing energy-efficient appliances. These actions will not only save you cash on your energy bills, but you may also qualify for tax benefits. The federal Solar Tax Credit, for instance, gives homeowners the opportunity to earn up to 30% of the costs for solar panels installed on their homes.

Conclusion

By following these tax tips, you can ensure that your summer's fun and relaxation isn't impacted by tax-related stress. It's essential that you review some of the tax tips discussed above and plan accordingly during the summer. While taxes may seem complicated initially, learning to navigate the tax code's complexities and opportunities can help you save a considerable amount of money and ultimately let you rest easy knowing that you're keeping your finances in check. Finally, by employing these tax strategies, you'll have more resources to enjoy the summer!