5 Ways to Save Taxes this SummerJune 21, 2019
There are certain tax breaks that are especially valuable during the summer, including hosting an outing for employees and renting out your home. Learn more.
Summer is officially here! While the Tax Cuts and Jobs Act (TCJA) scaled back or eliminated certain tax breaks, there are still plenty of opportunities to save this summer. Learn more.
5 ways to save
- Host an outing for employees- One special tax law provision that wasn’t touched by the TCJA is the 100% tax write off for company outings for employees. As long as you invite the entire staff, not just higher-ups, you can claim the 100% deduction. Inviting friends and family members won’t jeopardize the deduction, but the costs associated with these guests are not deductible.
- Combine business travel with pleasure-While the TCJA eliminates deductions for most business-related entertainment expenses, small business owners can generally deduct the cost of business travel, such as airfare and lodging, if the primary purpose of the trip is business-related. Due to TCJA changes, you can no longer deduct the costs of tickets to sporting events, sailing or golf outings theater tickets, etc. You are still able to deduct 50% of your meal expenses.
- Schedule Time at Your Vacation home-Do you rent out your vacation home for part of the summer? You can typically deduct related expenses against the rental income. Also, if your personal use for the year doesn’t exceed the greater of 14 days or 10% of the rental time, you might be able to claim a rental loss.
- Claim Dependent Care Credits- Do you pay for child care during the summer? You may be eligible for a dependent care credit for a qualifying dependent (child under 13, or an individual who is physically or mentally incapable of self-care who has lived with you for more than half the year). The credit ranges from 20%-35% (based on adjusted gross income- AGI) of the first $3,000 of qualified expenses for one child, or 20%-35% of up to $6,000 of qualified expenses for two or more children. Qualified expenses include day camp costs and specialty camps for athletics, academics or other pursuits. Overnight summer camps are not included.
- Hire Your Kids- Check out our blog, Hire Your Kids This Summer and Save Taxes. Essentially, when you hire your teenagers and college aged children, your business can deduct the wages as a business expense, and your child can net his/her income against the standard deduction ($12,000), hence no taxable income!
Don’t miss out on these saving strategies! The TCJA has certainly shaken things up, but there are still tax saving opportunities of which you can take advantage.
Contact us for guidance on your personal or business tax situation.
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