I know that April 16th is a ways away but there’s no time like the present to start thinking about saving on next year’s taxes. And you can do that event while you’re having fun all summer long! Mixing business with pleasure is no faux pas when it comes to keeping some hard earned cash in your piggy bank. So how can you make your business/getaway as well as other summer time expenses tax deductible? Deduct costs to and from your destination, including airfare and ground transportation. If you go away for 10 days, spending 6 days on business and 4 days with your family, this mixed trip can give you transportation deductions. Kids at summer camp or day care? Deduction ; ) How’s that for a break?
Business Travel
If you find that you must travel to secondary or temporary locations during your work day, even within your metropolitan area AND as part of your job and your employer does not reimburse you for that travel, those expenses may be tax deductible. Also, travel to and from a second job may be tax deductible.
Un-reimbursed expenses for business travel outside of your metropolitan area may also be tax deductible. And you generally can deduct 50% of the cost of qualifying meals and entertainment expenses. Keep your receipts and make notes of who you were with, why, etc. It will come in handy later on, especially if the IRS decides they want to check you out. You’ll have a nice account of why you have these deductions.
Summer Camps & Day Care count too!
If you’re a working parent or looking for a job, you may qualify for the Child and Dependent Care Credit when school is or is not in session. Check this out:
- Day camp costs can count as an expense towards the Child and Dependent Care Credit. Unfortunately, overnight camps do not qualify.
- Babysitters or daycare will earn you a tax benefit if you qualify for the credit.
- The Child & Dependent care Credit credit can be up to 35 percent of your qualifying expenses, depending on your income.
- You may use up to $3,000 of the unreimbursed expenses paid in a year for one qualifying person or $6,000 for two or more qualifying people to figure the credit.
Having a garage sale? Donate your left over items for a deduction!
You are able to deduct your contributions or property donations to charitable (non-profit) organizations only if you itemize your deductions. Just remember, not every non-profit organization is a tax-qualified charitable organization. Ask the organization first whether your contribution is tax-deductible and keep track of what was donated as well as noting the value.
When you donate property to a charity, you generally can deduct the fair market value of the property. But you must reduce the value of the donated property (this includes a vehicle) by the amount of income that would be ordinary income or short-term capital gain if you sold the property for its fair market value. Capital gain property is the term used to describe donated property the sale of which would result in long-term capital gain if sold.
You can deduct the purchase price of new items, but the deductible amount for used goods, such as clothing, household goods, furniture and other non-cash items is based on the item’s fair market value. When figuring the fair market value of used goods, check prices in stores that sell used goods, such as thrift stores. Items need to be in good condition or better to claim it as a deduction.
Your donations do not have to stop at small items that you do not sell at a garage sale, as even large pieces of property can be donated. For example, a California boat donation allows you to donate an old boat that you no longer use to charity and receive a tax deduction for your generosity. The boat is then sold at auction, with the money going to charity, and your deduction is in the amount of either the book value or the final purchase price through form 1098c. There is no cost to you for making this donation and it could end up helping you considerably come tax season.
There s a special form to fill out If you donate non-cash items with a total value of more than $500. You may need a qualified appraisal if you donate an item or a group of items with a value of more than $5,000. Always be sure to chat with your tax person about any and all deductions to make sure you’ve got all the correct info, forms and documented paperwork to back it up.
So, remember to keep your receipts and notes in a safe place this summer, especially if you’re traveling. You will thank yourself in a few months and so will your wallet ; ) Now get back in the pool and enjoy your summer!!
