- Consider the tax shelter aspects of owning a home. You get a deduction for real estate taxes and for interest on your home mortgage (up to $1 million) or home-equity loans where available (up to $100,000).
- Check the tax savings of combining business and pleasure on the same trip this summer. Within the U.S., if the primary purpose of the trip is business and you add on a side trip or an extra few days for pleasure, you can deduct all the travel costs to and from your business destination and all other business-related costs. You can’t deduct costs related to the pleasure portion.
- As you review your income tax situation at midyear, consider your exposure to the alternative minimum tax (AMT). The alternative minimum tax involves a separate tax calculation that disallows many of the deductions and credits used to calculate regular income tax. If you have high levels of deductions or exemptions, or if you exercise incentive stock options this year, it’s worth checking for possible AMT liability so it doesn’t take you by surprise.
- Day camp. If you and your spouse work, the cost of sending your children to a summer day camp may qualify for the child care credit.
- Business entertaining. Summer is a good time to do business entertaining. Keep records of the cost, the date, the attendees, and the business purpose. Your tax deduction is limited to 50% of the cost.
The information on this site is general in nature and should not be acted upon in your particular situation without further details and/or professional advice. For assistance, contact our office.