Summer is here and so are tax-saving opportunities. Here are seven suggestions for cutting your tax bill.
Rent out your vacation home. If you own a second home, rent it out this summer when you’re not using it. Generally, you can offset the rental income with rental-related expenses, leaving you with little or no tax liability.
Harvest capital gains or losses. Use your semi-annual portfolio review to spot investments with built-in capital gains or losses that can offset transactions from earlier in the year. Any excess capital loss can be deducted against $3,000 of ordinary income in 2015.
Hire your kids. Does your child need a summer job? Hire her to work in the family business. The wages earned will be taxed using your child’s lower tax bracket.
Send the kids to camp. Are you the working parent of under-age-13 children? You may be able to claim a tax credit for the cost of day camp. Just remember, overnight camps don’t qualify.
Combine pleasure with business. When you travel out of town for business reasons, you can deduct the full cost of your airfare, even if you spend time sightseeing while you’re away. Expenses for side trips aren’t deductible.
Entertain business customers. Generally, you can deduct 50% of the cost of entertaining customers before or after a substantial business discussion. This includes golf outings or an evening of dinner and drinks.
Host a staff get-together. The usual 50% limit on entertainment deductions doesn’t apply to summer barbecues and picnics if the entire staff is invited. In that case, you can write off 100% of the cost.
Contact us for details on these and other summertime tax-saving ideas.
Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in the McLean and Tysons Corner, VA. Gilliland & Associates specializes known for our superior knowledge and aggressive interpretation and application of tax laws, we help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and Twitter.