Recent tax reform led to major changes to the tax code. Summer months can provide an opportunity to review how these changes will impact your tax obligations. In addition, summertime also provides an opportunity to take advantage of some unique, season specific tax benefits.
Some examples include:
- Day camp expenses. As noted in a recent piece by U.S. News, day camps can count towards a tax credit. The cost of sending children under the age of 13 to these summer day camps can go towards the Child and Dependent Care Credit. This tax credit can result in up to $3,000 of tax savings. It is important to point out that certain restrictions apply. These can include age limits and that the camp is a day camp, not an overnight camp.
- Summer cabin rental. Renting out a second property is tricky. One of the concerns to take into consideration before deciding to rent out the property is the potential for tax obligations on income earned from the rental. However, if you rent the property for less than 15 days you generally do not have to report the income. This can provide a way to get some financial benefit from the property without additional tax obligations.
- Weather damage. Summer weather in Wisconsin and Minnesota can be unpredictable. Tornadoes and even hail are not uncommon. In some cases, taxpayers can deduct the costs to repair the damage caused by these weather patterns.
Hopefully these tax benefits can help you make the most of your summertime.