Eight tips from IRS on summer activities with tax implications
As you reflect on summer memories, the Internal Revenue Service reminds you that some seasonal activities may have a tax benefit or implication.By: Staff Report, Alexandria Echo Press
As you reflect on summer memories, the Internal Revenue Service reminds you that some seasonal activities may have a tax benefit or implication.
If you helped a charity, moved, married, vacationed, experienced a damaging storm, sent the kids to camp or paid for college, hold onto the records or receipts. “If you haven’t already, establish a central location to keep tax-related documents,” said Carrie Resch, IRS spokesperson. “Not only are some records required to claim a tax benefit, but they can also remind you of months-old transactions and simplify the process when you file in 2012.”
Here are tips from the IRS that may help you lower your taxes or avoid tax problems:
1. If you got married report any name change to the Social Security Administration before you file your next tax return and report any address change to the Postal Service, your employer and the IRS to ensure you get tax-related items. Also, use the Withholding Calculator at IRS.gov to make sure your withholding is correct now that there are two of you to consider.
2. If you helped a charity If you drove your personal vehicle while helping a qualified charity, you can deduct 14 cents per mile. Also, items you donated after spring or summer cleaning may garner you a tax deduction if you gave to a qualified charity and the items were in good condition. You must have proof of all donations and itemize when you file.
3. If you sent the kids to day camp - Many working parents must arrange for child care while school is out. If your child under age 13 attended a summer day camp, the cost may count towards the Child and Dependent Care Credit. (Overnight camps do not qualify.)
4. If you gambled - If Lady Luck smiled on you during your vacation, remember you must report gambling winnings on your tax return. Losses, substantiated by good records, are deductible only if you itemize and have winnings that equal or exceed your losses.
5. If you moved - If you relocated for work, you may qualify to deduct mileage, lodging and costs of moving your belongings. You don’t have to itemize for this deduction, but you do need to satisfy distance and time tests.
6. If you paid college expenses - College students or parents who pay college expenses like tuition and fees or books, supplies and equipment required for coursework may qualify for one of three tax benefits available in 2011 to offset college costs.
7. If you experienced a disaster - If a flood, storm, fire or other disaster damaged your property, you may be able to claim a casualty loss for the reduction in its value. If your county was declared a federal disaster area, you may be able to file a tax return immediately to claim that loss.
8. If your situation changed - A marriage or divorce, a change in number of dependents, a home purchase, retirement or a large change in income can alter the amount of tax you owe. Making withholding adjustments now gives you a few months to stretch out the changes and avoid a surprise when you file in 2012. The Withholding Calculator at IRS.gov can help.
For details about any of these topics, visit www.irs.gov
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