The sun is shining, the birds are singing, and nothing could be further from your mind than income taxes. Sure, summertime doesn’t exactly scream taxes, but what if you did give a little extra thought to your finances this season? You might be surprised at the many ways you can reduce your 2017 income taxes. Filing a tax return is a cinch when you make tax liability reduction a year-round occupation.
Do you already have your summer plans mapped out? Perhaps it’s a big move, a business trip, or education plans – There are deductions that can be used to save you some coin. Here’s a list of 4 summertime tax strategies for you to take full advantage of.
Moving Expense Deduction
Nearly 40 million Americans relocate every year. While people move at various times, most tend to move during the spring and summer months, from May to September. This is likely because the weather is less inclement – avoiding snow and ice, if possible, is probably a great idea. The federal law allows you to write off moving expenses if your relocation is due to a new job or a transfer to a different location by your current employer. In order to quality for this deduction the distance between your new job and your prior home must be at least fifty miles farther than your former employer is from that home. The other requisite is that you must work at least 39 weeks during the period of a year. The countdown begins the day you arrive at your new location.
Energy-Efficient Home Improvement Deduction
During the dog days of summer we might find ourselves desperately seeking sanctuary in between freezer doors or inches away from a fan on full blast. We all know how unbearable temperatures can get, and we also know how much energy can be used to remain cool. Planning to invest in some home improvements might just be the solution you need to endure the ensuing heat of the season while saving yourself some money. When you install certain renewable energy sources to your home, you qualify for a tax credit worth up to 30% of the total cost, in addition to saving money on utilizes. Further, this credit is not restricted to only your primary residence. It may be claimed for newly constructed homes as well.
Business Vacation Deduction
Mixing business with pleasure is a unique advantage of working at a small business. The first thing to know is that you may deduct transportation expenses if the primary purpose of the trip is for business. If the number of personal days exceed the number of business days, you probably will not be able to take advantage of this deduction. (Travel days do count as business days). The IRS requires that you establish “prior set business purpose” to ensure that the days spent during your travels actually have purpose and intent.
In addition to transportation, for every day that’s considered business, you may write off your entire lodging, tips, and car rental expenses. You may deduct 50% of your meals during business days and all travel-related expenses such as baggage fees. Unfortunately you may not deduct travel expenses for your family.
There are numerous deductions on higher education that you can take advantage of. Education credits can be earned by meeting three requirements. Qualified education expenses for higher education are payed. An eligible student must be enrolled at an eligible educational institution. Lastly, the student is either, a spouse, or a dependent you list on your tax return. The American Opportunity Credit and Lifetime Learning Credit are both possible choices to help you with the cost of education. Seeking advice of tax professionals will allow you to fully understand the education tax breaks that are relevant to you.