These Summer Activities Can Affect Next Year’s Tax Returns

16 Aug These Summer Activities Can Affect Next Year’s Tax Returns

Summertime activities often affect the tax returns people file the following year. Here are some things taxpayers do during the summer along with tips they should consider now:

• Getting married: Newlyweds should report any name change to the Social Security Administration. They should also report an address change to the United States Postal Service, their employers, and the IRS. This will help make sure they receive documents and other items they will need to file their taxes.

 

• Sending kids to summer day camp: Unlike overnight camps, the cost of summer day camp may count towards the child and dependent care credit.

 

• Working part-time: While summertime and part-time workers may not earn enough to owe federal income tax, they should remember to file a return. They’ll need to file early next year to get a refund for taxes withheld from their checks this year.
   
  Normally, employees receive a Form W-2, Wage and Tax Statement, from their employer to account for the summer’s work. They’ll use this to prepare their tax return. They should receive the W-2 by January 31 next year. Employees will get a W-2 even if they no longer work for the summertime employer.

  Summertime workers can avoid higher tax bills and lost benefits if they know their correct status. Employers will determine whether the people who work for them are employees or independent contractors. Independent contractors aren’t subject to withholding, making them responsible for paying their own income taxes plus Social Security and Medicare taxes.

Payroll Partners is committed to helping clients stay informed about payroll, tax and human resource news, developments and current events. This article is intended to provide readers with general information on these matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular practice. All efforts have been made to assure the accuracy of the information. Payroll Partners does not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular practice. If you are seeking payroll, tax and/or human resources advice, you are encouraged to consult a payroll, tax and/or human resources professional.