Your summer vacation could save you money at tax time.
You’ve been working hard all year long. Summer is a good time to take that vacation and get away from the high heat that has been stifling many areas of the country. Typically, you wouldn’t associate summer fun with filing taxes, but doing so can save you some money.
You can take that much-needed vacation while acquiring a tax deduction or two. It’s possible with these ideas.
Investment Property
Do you own rental property or are you thinking of purchasing a rental as an investment? Whether in a nearby city or in another state, travel to check on your rental property investment is tax deductible. You must actually visit your rental property for travel and any overnight stay to be deductible. Travel to view rental investment properties and to sign contracts to purchase your investment home or apartment may also be deductible.
Business And Pleasure
If you are working via a laptop computer, cell phone or other mobile device while on business/vacation, H&R Block states that “you can deduct costs to and from your destination, including airfare and ground transportation. If you go away for 10 days, spending six days on business and four days with your family, this mixed trip can give you transportation deductions.” Such a sweet deal.
Kids At Camp, Parents Will Play
Perhaps the kids are away at summer camp and you want to vacation at home to save money. As a parent, you may save even more if you qualify for the Child and Dependent Care Credit. The Internal Revenue Service notes these five things you need to know about the credit during the summer:
- The cost of day camp can count as an expense towards the Child and Dependent Care Credit.
- Overnight camps do not qualify.
- If you’re using a babysitter or daycare outside the home, you’ll get some tax benefit if you qualify for the credit.
- Depending on your income, the actual credit can be up to 35% of your qualifying expenses.
- You may use up to $3,000 of the unreimbursed expenses paid in a year for one qualifying individual or $6,000 for two or more qualifying individuals to figure the credit.
With the advice of your tax advisor, you can plan your vacation wisely and deduct expenses to save money when tax time rolls around again.
Photo Credit: wsilver on www.flickr.com
Source: http://www.irs.gov/newsroom/article/0,,id=172245,00.html
