Summer activities and tax year 2023

For many people, summertime means change. Whether it’s a life change like a marriage or a typical summer event such as sending the kids to camp, things people do in summer could affect their income taxes. Here are a few summertime activities and tips on how you can help your clients think about these scenarios.

Getting married

Wedding season is upon us and newlyweds can make tax filing easier by doing a few simple things. First, report any name change to the Social Security Administration. Next, notify the U.S. Postal Service, employers, and the IRS of any address change. To officially change their mailing address with the IRS, taxpayers must compete Form 8822, Change of Address, and mail it to the correct address for their area. See page 2 of the form for detailed instructions. Making these changes as soon as they happen will help make filing their tax return easier.

Sending kids to summer camp

If a taxpayer is sending a child to summer camp, the cost may count toward the Child and Dependent Care Credit.

Traveling for business

Kids may have the summer off, but parents generally don’t. Business travel happens year-round. Tax deductions are available for certain people who travel away from their home or main place of work for business reasons. Whether a business traveler is away for a few nights or all summer long, it is important for them to remember the rules related to business travel.

Working part time

While summertime and part-time workers may not earn enough to owe federal income tax, they should file a tax return to get any refund they may be owed. Part-time and seasonal workers can visit IRS.gov to learn more about who should file a tax return. Some taxpayers earn summer income as a gig economy worker. These workers are encouraged to visit the IRS’ Gig Economy Tax Center to learn how participating in the gig economy can affect their taxes. If taxpayers are paid through payment apps and receive more than $600, they may receive an IRS Form 1099-K reporting their earnings.

Home improvements

Nothing says summertime quite like a list of around-the-house projects. The IRS has information to help taxpayers take advantage of potential tax benefits for some home improvements. If taxpayers make qualified energy-efficient improvements to their home after Jan. 1, 2023, they may qualify for a tax credit up to $3,200. They can claim the credit for improvements made through 2032. Taxpayers are encouraged to visit the IRS’ Energy Efficient Home Improvement Credit to learn more.

If taxpayers make energy improvements to their home, tax credits are available for a portion of qualifying expenses. The credit amounts and types of qualifying expenses were expanded by the Inflation Reduction Act of 2022. These types of projects include Energy Efficient Home Improvement Credit for water heaters, exterior windows and doors, and heating and air conditioning installations. Residential Clean Energy Credits are available for taxpayers who install solar, wind and geothermal power generation; solar water heaters; or fuel cells and battery storage.