Summertime, Travel and Vacation Tax Tips

Summer Rentals: there are a lot of tax rules related to real estate rentals. One interesting rule is that if a personal residence is rented out for less than 15 days, the rental income is not considered to be gross income and does not need to be included on your tax return. (Note that there are some other tests that apply, to ensure the exclusion is valid).  This can be helpful when your home is in an area where film production is taking place and the production company wants to use your home, or if you wish to rent it out for a short time while you are away on vacation.  You can still deduct all of the related expenses such as mortgage interest and real estate taxes.

Summer Camp: the Child and Dependent Care Credit applies if you work and you hire someone to care for your children or send them to day camp. Overnight camp doesn’t qualify for the credit.   It is allowed until the child reaches age 13, with certain exceptions. You must provide the name, address, and Tax ID number of the care provider (or camp). The Child and Dependent Care Credit permits a maximum of $3,000 per child (to a maximum of $6,000 total) to be used in calculating the amount of credit you will receive.   The credit could be as high as $2,100, depending on your income and number of children in day care.

Travel Expenses: generally, expenses for personal travel are not deductible. However, if you are travelling out of town to seek new opportunities in the same line of work that you are presently in, the expenses for meals, lodging, and travel are deductible. If a trip is combined to include both personal aspects as well as the job search activity, you may deduct the travel expense to and from the area only if the primary purpose of the trip was to seek employment.  Keep a good record of all job search activities and expenses.

Those are some fun facts that may prove beneficial for your summer activities. As always, Sternbach & Rose, CPAs are available to discuss questions you may have at any time of the year. Enjoy your summer !



Ellen RoseContributor: Ellen Rose

Ellen Rose is a CPA with over 25 years of tax, accounting, and business experience. She is knowledgeable, client-focused accountants who make sure their clients get the best possible service and attention. Her accounting practice focuses on the needs of small businesses and start-ups. She is especially passionate about helping entrepreneurs succeed and thrive in today’s very competitive and challenging business climate. Sternbach & Rose, CPAs – Where you’re never just a number.

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