Summer may be one of the best times to review your taxes, because taking the time now could result in 2017 tax savings. Here are just a few tax-saving ideas to consider.
• If you and your spouse work and are considering sending your children to a summer day camp, the cost may qualify for the dependent care tax credit.
• Do you own a boat or recreational vehicle? As long as the vehicle has sleeping space, a bathroom, and cooking facilities, you may be able to claim it as a second home and deduct the interest payments on your loan.
• If you have vacation/rental property, you can control your tax deductions by changing the number of days you use your vacation home. In planning your vacations, be sure to find out how many days of personal use will lead to the best tax deductions on your property.
• If you operate an unincorporated business, consider hiring your children to work for you this summer. You can deduct reasonable wages paid to them for the work they perform, and there's no social security tax on their wages if they are under age 18.
• Summer is great for entertaining customers or clients. If you keep records of the cost, the date, who was entertained, and the business purpose of the event, you may deduct 50% of your business entertainment expenses.
• If you can combine business activities with your summer vacation travel, you may be able to take a tax deduction for the business portion of your costs.
Be sure to call us if you would like to discuss tax-cutting strategies suited to your situation.