Summer Tax Tips: School is Out for the Summer, but Tax Planning and Tax Concerns effecting you are Year-Round

Now that the April filing deadline has passed, most people are spending more time thinking about summer vacations than taxes. However, summer is a great time to review withholding and see if summer plans will affect next year’s tax return. Below are some common summertime tax situations and tips to help taxpayers figure out if they apply to their tax situation.

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. To report a change of address for federal tax purposes, taxpayers must complete Form 8822, Change of Address and submit it to the IRS. This will help make sure they receive the documents 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.

Gig economy work

Taxpayers may earn summer income by providing on-demand work, services or goods, often through a digital platform like an app or website. Examples include ride sharing, delivery services and other activities. Those who do are encouraged to visit the Gig Economy Tax Center at IRS.gov to learn more about how participating in the gig economy can affect their taxes.

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 contractorsPDF. Independent contractors aren’t subject to withholding, making them responsible for paying their own income taxes plus Social Security and Medicare taxes.

Remember to File your Tax Return if you got an Extension

People who requested an extension to October 17 or missed the April deadline should be sure to file their return. You can get started online or contact our office. A CPA can prepare and e-file tax your personal and or business tax returns for you or you can use our DIY self-prepare option for your personal return filing.

Adjust withholding now to Avoid Tax Surprises next year

Taxpayers can avoid a tax surprise next filing season by reviewing their withholding now. Life events like marriage, divorce, having a child, or a change in income can all affect taxes. A tax filing status change from married to single and or a change in dependents you can claim can play a role in the mix. The IRS Tax Withholding Estimator on IRS.gov helps employees assess their income tax, credits, adjustments and deductions and determine whether they need to change their withholding by submitting a new Form W-4, Employee’s Withholding Allowance Certificate. Taxpayers should remember that, if needed, they should submit their new W-4 to their employer, not the IRS. If you prefer you can contact our office a CPA can assist you with tax planning and prepare the forms for you.

Don’t forget to pay your Quarterly Estimated Taxes

It’s summer and vacation time its so easy to forget. If you are earn income from self-employment or are required to pay quarterly estimated tax payments for federal, state and local tax authorities we are here to help you. We can can run your tax projections for the quarter and provide you the estimated tax figures for you pay in to the tax authorities.

Due Dates for 2022 Estimated Tax Payments
Payment When Income Earned in 2022 Due Date
1st Payment January 1 to March 31 April 18, 2022
2nd Payment April 1 to May 31 June 15, 2022
3rd Payment June 1 to August 31 September 15, 2022
4th Payment September 1 to December 31 January 17, 2023
You might receive a Tax Notice 

After tax season is when the IRS or Sate/Local tax authorities start sending out Tax Notices. The most common notices are for (1) computer Audit Change to your Return, (2) Unpaid Taxes or Penalty Assessment, (3) Notice that you Defaulting on your payment plan or (4) requesting you file your Unfiled Returns. It’s always a good idea to contact our office if you relieve any tax notice a CPA can review, advise and respond to the notice for you on your behalf.

 

Contact our office 215-945-4200 today for Help with Tax Preparation, Tax Planning or assist you if you receive Tax Notices. We provide Tax Preparation and Tax Problem Resolution services for both Individual & Business taxpayers. A CPA will help you with all your Tax Matters. Our office is open year-round for services and assistance. Call our Office of Book your appointment online.