Here it is mid-summer and probably the last thing on people’s minds is working on their taxes. But just as sure as that ice cream cone will melt before you can eat it in the 90-degree heat, tax season will make its return sooner than later.
Here it is mid-summer and probably the last thing on people’s minds is working on their taxes. But just as sure as that ice cream cone will melt before you can eat it in the 90–degree heat, tax season will make its return sooner than later.
Getting married? Maybe your teenager is working at a part-time job or your middle-schooler is spending a few weeks at camp. Or you finally have time to do a little volunteer work. These are all activities that will have an impact on your 2019 tax filing.
Newlyweds, in addition to reporting any name change to the Social Security Administration ASAP, should check their tax withholding to ensure they are paying the correct amount of tax as earned throughout the year. The IRS has an online withholding calculator to make things easier. If needed, you can change withholding by completing and submitting Form W-4 (Employee’s Withholding Allowance Certificate) to your employer.
Teens performing part-time and/or seasonal work take note. Employers typically must withhold Social Security and Medicare taxes from your paycheck even if you don’t earn enough to meet the federal income tax filing threshold. Usually, employees receive a W-2, Wage and Tax Statement from their employer by January 31 of the following year (whether or not they still work there) to account for the summer work they performed. Those who are self-employed or independent contractors have to pay their own Social Security and Medicare taxes, even if they have no income tax liability.
Sending your kids to day camp this summer? Not only will they enjoy the great outdoors and new experiences (and won’t be moping around the house saying, “I’m bored”) but the cost, unlike overnight camps, could count as an expense towards the Child and Dependent Care Credit. For more information, check out Publication 503, Child and Dependent Care Expenses on the IRS website.
Good for you for finally carving out some time to do a little volunteer work. You can deduct mileage if driving a personal vehicle while donating services on a trip sponsored by a qualified charity. Itemizers can deduct 14 cents per mile for charitable mileage driven in 2019.
And if your spring cleaning has been delayed into the summer, look into donating those “in good condition, but not my taste anymore” items to a qualified charity – you just may be eligible for a tax deduction. But be aware – taxpayers must itemize to deduct charitable contributions and have proof of all donations.
Now for all the business owners out there hiring summer help. You must correctly determine whether summer workers are employees or independent contractors. The latter are not subject to withholding, so they have the responsibility of paying their own income taxes, in addition to Social Security and Medicare.
The tax filing season will be here before we know it, but in the meantime enjoy the remaining weeks of summer, one and all!
Disclaimer: Any written tax content, comments, or advice contained in this article is limited to the matters specifically set forth herein. Such content, comments, or advice may be based on tax statutes, regulations, and administrative and judicial interpretations thereof and we have no obligation to update any content, comments or advice for retroactive or prospective changes to such authorities. This communication is not intended to address the potential application of penalties and interest, for which the taxpayer is responsible, that may be imposed for non-compliance with tax law.