During warm summer days, you may be tempted to forget about serious things like taxes. But that could lead to a higher 2014 tax bill. Here are just a few summertime tax-saving ideas to consider.
* If spring cleaning left you with outgrown clothing and household items you no longer use, donate them to charity. Items in good used condition qualify for a deduction.
* If you and your spouse work, consider sending your children to a summer day camp. The cost may qualify for the dependent care tax credit.
* Do you own a boat or recreation vehicle? Are you thinking about buying one? 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. Keep records of the cost, the date, who was entertained, and what the business purpose was. Your tax deduction is limited to 50% of your cost.
* Combine business with your summer travel, and you may be able to take a tax deduction for the business portion of your costs.
By all means, enjoy your summer. But don't forget taxes. Give us a call if you would like to discuss tax-cutters suited to your specific situation.
Jeremiah K. Murphy, CPA is an accounting firm providing tax services, audits and business consulting.