Hello, July! Yeah, I know my welcome to the first full month of summer is a bit late. But admit it. You don’t really focus on the month either until after you wrap up July 4th celebrations.
Since Independence Day this year fell on Tuesday, that meant an extra-long holiday weekend for lots of us. But the fireworks are over and, sadly, we’ll never be independent of taxes.
So it’s back to work this first week of July, and back to making tax moves that can at least keep a few more dollars out of Uncle Sam’s clutches.
Here are six to consider this July.
1. Claim your 2019 tax refund. No, I didn’t misread my calendar. But more than 1.5 million taxpayers didn’t file a 2019 tax return back in 2020 and missed out on that year’s refund. If that’s you, you have until July 17 to file that old Form 1040 and claim your tax cash. If you miss the fast-approached due date, Uncle Sam gets to keep their refund.
2. Don’t miss Tax Day on July 31. Again, that’s not a typo. It’s the tax deadline for filers in four states who earlier this year were in areas hit by major storms, including tornadoes. Since those locales were declared major disaster areas, the Internal Revenue Service provided residents and business owners there a variety of tax relief, including a new 2022 return filing deadline. That’s July 31 for affected taxpayers in disaster areas in Arkansas, Indiana, Mississippi, and Tennessee.
3. Take a summer job into tax account. Summertime and the living, at least musically, is supposed to be easy. Some people, though, take on summer jobs. Even if it is a short-term, seasonal job, it will affect your taxes.
If it’s a side job to a full-time salaried one, you can account for the additional earnings in your regular paycheck’s withholding. The Internal Revenue Service’s online withholding tool makes filling out W-4 easier. If you prefer, you can account for the added income by making estimated tax payments.
And while summertime is time off from school for many young people, they want (and their parents need) something else, like a job, to occupy all their free hours. If you’re the parent of a youngster who’s working now that classes are over for a few months, both of y’all should be aware of the tax implications for young employees.
4. Keep track of day camp expenses. Your youngsters are too young to work, so you’re sending them to day camp to keep them occupied while you’re at work. Make not of that expenditure. Day camp costs count toward the Dependent and Child Care Credit.
The key here is that the camp is during normal working hours. Overnight, sleep-away camps costs don’t qualify.
Also, Uncle Sam won’t subsidize you taking a break from your children. You must be working or actively seeking a job to be eligible for the child care credit. If you’re married, that requirement applies to both spouses.
5. Take advantage of sales tax holidays. Florida, which really should change its name to the Sales Tax Holiday State, has four events this month that can save its shoppers sales tax dollars. Its Freedom Summer means no tax on myriad recreational expenditures for a couple more months. Plus, the officially dubbed Sunshine State has four more tax holidays this month. The Home Hardening Sales Tax Exemption helps Florida property owners get their homes hurricane ready. It’s also offering sales tax relief on purchases of Energy Star appliances, and gas ranges and cooktops. It wraps up July with its two-week back-to-school summer sales tax holiday that starts July 24.
Three other Southern states also have back-to-school tax holidays in July. Alabama’s tax-free event runs July 21-23. Mississippi’s tax holiday is July 28-29; note that the link goes to the 2022 holiday, since the state’s revenue website hasn’t yet posted the 2023 specifics. Tennessee’s school shopping tax saving days are July 28-30.
6. Get ready for disastrous weather. We’re into the second month of the 2023 Atlantic/Gulf of Mexico hurricane season, and it has, thank goodness, been relatively calm so far. But as summer temperatures, both on land and in the country’s surrounding waters, soar, so will the chances of tropical development. This welcome lull is the perfect time to get storm ready in case the worst arrives.
More July tax moves: I know, that’s a lot for most of us, especially when we’re starting our week on a Wednesday.
But if you’re a committed tax geek and these six tax actions have whetted your appetite, you can check out a few more July Tax Moves to make over there in their usual place, the ol’ blog’s right column just below the clock counting down to the October filing extension deadline.
If the moves in this post or some of the others listed in the adjacent column apply to your personal tax situation, take advantage of them. Their potential tax savings might help pay for a longer well-deserved summer vacation.
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