Summertime Tax Tips

8/1/2018 | Written by: Selena Quintanilla

So many amazing things happen during the summer: vacations summer camp for the kids, starting a new job, and even tying the knot! Certain summertime activities may even qualify you for tax credits or deductions. Here are some things to keep in mind today to avoid unwelcome surprises come time to file:

Determine your worker classification. Knowing your worker classification can help you avoid unexpected tax bills. If you snag a summer job, don't let your excitement get the best of you. Pay close attention to whether you are being brought on as an employee or independent contractor. Independent contractors are not subject to withholding, which means falling under this classification will make you personally responsible for paying income taxes plus Social Security and Medicare taxes. 


Summer workers may not earn enough to owe income tax. Your summer job may not pay enough to result in you owing income tax, but usually your employer will still withhold Social Security and Medicare taxes from your pay. Additionally, independent contractors are required to pay their own Social Security and Medicare taxes.  

Pay close attention to your withholding. Regardless of your employment classification, check your withholding on a regular basis to ensure the correct amount of tax is being withheld. If you need assistance calculating the right amount of tax, there is a withholding calculator available for use on the IRS.gov.

The calculator can also assist in estimating income, credits, adjustments, and deductions for most financial situations. Employees can use their results from the calculator to fill out the W-4 form and adjust their income tax withholding. They must give their updated forms to their employers for the changes to take effect. 

Tying the knot? Don't let unforeseen tax issues put a damper on your marital bliss! If you're taking your spouse's last name, be sure to report your new name to the Social Security Administration before filing next year’s tax return. Additionally, you will need to notify the United States Postal Service and your employer of any changes to your address. It's also recommended to communicate these changes to the IRS to ensure timely receipt of tax-related documents. Adding to your household will affect the amount of tax that should be withheld from your pay going forward, so be sure to recheck your withholdings! 

Parents may be entitled to a credit for summer day camp expenses. A break from school for the kiddos doesn't mean their parents can stop working. Each year more and more parents are opting to send children under the age of 13 years to day camp. Expenses paid for day camp may count toward the Child and Dependent Care credit, assuming all other requirements are met. For details on the Child and Dependent Care credit visit the IRS.gov. 

Refunds require submission of a tax return. It could be in your best interest to file a tax return, even if you don't have a filing requirement. Filing a tax return may result in a refund of income tax withheld; though this isn't guaranteed, it's certainly worth a shot. Keep in mind that there is no penalty for filing a late return if a refund is due. However, if your tax return isn't filed within three years, your refund will become the property of the U.S. Treasury.