Tax Newsletter - July - August 2019 No Images? Click here July - August 2019 Tax NewsletterA sunnier tax season with these summertime IRS tax tipsWhile it is summer and you may have filed your tax returns for 2018, it does not mean that you should not be thinking of the upcoming tax season for 2019 filings. The Internal Revenue Service suggests some summer tips for taxpayers to think about especially if any of these events are happening. Are you …. · Buying a home? · Working a summer job? · Volunteering? These activities that are common in the summer often qualify for tax credits or deductions. Also, summertime and part-time workers may not earn enough to owe federal income tax but could get a refund of taxes withheld if they file a tax return. Here are summertime tax tips from the IRS that can help taxpayers during upcoming tax filing season of 2019: 1) Marital changes. Newlyweds should report any name change to the Social Security Administration before filing their next tax return. Then, report any address change to the United States Postal Service, employers, financial institutions, and the IRS to ensure receipt of all tax-related items. 2) Credit for summer day camp. Unlike overnight camps, the cost of summer day camp could qualify as an expense towards the Child and Dependent Care Credit. 3) Part-time and summer work. Employers must withhold Social Security and Medicare taxes from pay for part-time and season workers even if they don’t earn enough to meet the income tax filing threshold. Employees will receive a Form W-2, Wage and Tax Statement, from their employer by January 31 of the following year to record for the summer’s work. The Form W-2 shows the amount of earnings, withholdings for state and federal taxes, Social Security, Medicare wages and tips. Employees would utilize this form when they file their annual tax returns. 4) Worker classification by employers. Employers must correctly determine whether summer workers are employees or independent contractors. Independent contractors are not subject to withholding, making them responsible for paying their own income taxes plus Social Security and Medicare taxes. Employees can avoid higher tax bills and lost benefits if they know their proper status. While the higher standard deduction means fewer taxpayers are itemizing each year for deductions, those that still plan to itemize next year should keep the following tips in mind suggested by the IRS: 1) Deducting state and local income, sales and property taxes. The total deduction that taxpayers can deduct for state and local income, sales and property taxes is limited to a combined, total deduction of $10,000 or $5,000 if married filing separately. Any state and local taxes paid above this amount cannot be deducted. 2) Refinancing a home. The deduction for mortgage interest is limited to interest paid on a loan secured by the taxpayer’s main home or second home that they used to buy, build, or substantially improve their main home or second home. 3) Buying a home. New homeowners buying after December 15, 2017, can onlydeduct mortgage interest they pay on a total of $750,000, or $375,000 if married filing separately, in qualifying debt for a first and second home. For existing mortgages if the loan originated on or before December 15, 2017, taxpayers continue to deduct interest on a total of $1 million in qualifying debt secured by first and second homes. 4) Donations to charity. Deduct cash but obtain record of donations. Any long-unused items found during a summer cleaning and donated to a qualified charity may qualify for a tax deduction. Taxpayers must itemize deductions to deduct charitable contributions and have proof of all donations. Non-cash contributions of up to $500 are not required to be itemized. However, if your non-cash contributions amount to over $500, an additional form is required as well as receipt from the charitable organization. So, get a receipt from Goodwill, etc. 5) Volunteering time. Mileage is deductible. Driving a personal vehicle while donating services on a trip sponsored by a qualified charity could qualify for a tax break. Itemizers can deduct 14 cents per mile for charitable mileage driven in 2019. The time spent volunteering is not deductible, however. 6) Reporting gambling winnings and losses. Taxpayers who itemize can deduct gambling losses upto the amount of gambling winnings. Additionally, the IRS indicates that these last tips are for taxpayers who have notbe required to file but may be duea refund, and those who may need to adjust their withholding. 1) Refunds requirea tax return. Although workers may not have earned enough money from a summer job to require filing a tax return, they may still want to file when tax time comes around. It is essential to file a return to get a refund of any income tax withheld. There is no penalty for filing a late return for those receiving refunds, however, by law, a return must be filed within three years to get the refund. 2) Paycheck withholding. Newlyweds, summertime workers, homeowners and every taxpayer in between should take some time this summer to check their tax withholding to make sure they are paying the right amount of tax as they earn it throughout the year. The Withholding Calculator on IRS.gov helps employees estimate their income tax, credits, adjustments and deductions and determine whether they need to adjust their withholding by submitting a new Form W-4, Employee's Withholding Allowance Certificate to their employer. 3) College Tuition.If you are at least a half-time student, you can possibly obtain a refund from the IRS if you are working part-time and not a dependent. 4) Child Tax Credit.You could also get a refund for children under the age of 17 years if you worked part-time and do not owe any income taxes. Have a great summer!!!! Reminder of pending tax filing due dates .........Did you file an extension? October 15 is around the corner! Contact us concerning the upcoming tax due dates. Watch the video of the tax highlights of 2018. Click here. 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