Summertime may be get-away time, but you can't get away from the tax implications that accompany most financial matters. Being aware of the tax issues — and preparing yourself for some tax breaks — sure beats putting your head in the sand, even if you are at the beach. So check out these tips for newlyweds, working students, parents with children at day camp and people who are moving ... and have a good summer!

Advice for Newlyweds

Being, or marrying, a June bride may be a "Cloud Nine" experience, but there are some practical things to attend to when the honeymoon's over and you get your feet back on the ground.

• Report any name change to the Social Security Administration, so your name and social security number will match when you file your next tax return.
• Report any address change to the U.S. Postal Service — they'll forward your mail and let IRS know your new address.
• Consider whether you'll file joint or separate returns.
• If you're buying a home, find out which expenses may be deductible and which are not.

Related Items:

• Advice for Newlyweds — more detailed tips and pointers
• Name/SSN Changes
• Pub. 530, Tax Information for First-Time Homeowners (PDF 112K)

Tips for Working Students

All employees have income tax withheld from their pay, right? Not necessarily. You may be exempt from withholding if:

• you can be claimed as a dependent (usually on a parent's return),
• your total 2004 income will not be over $4,850, 
• your unearned income (interest, dividends, etc.) will not exceed $250, and
• you had no income tax liability for 2003.

You'll still have to pay Social Security and Medicare taxes, but skipping unnecessary income tax withholding will put more money in your pocket now. Read Form W-4 carefully before filling it out for your employer.

If customers tip you, those tips are taxable. You must keep track of the amounts, include them on your tax return, and — if they total $20 or more in a month — report them to your employer by the middle of the next month.

Related Items:

• Tips and Taxes — basics of tip reporting
• Pub. 531, Reporting Tip Income (PDF 85K) — a thorough guide
• Pub. 1872, Tips on Tips (PDF 224K) — for food or beverage industry workers
• Form W-4, Employee's Withholding Allowance Certificate (PDF 53K) — with worksheets to figure how many allowances to claim (you may complete this form online and print it, but your Acrobat Reader may not save your entries with the file.)

Summer Day Camp

Many working parents must arrange for care of their younger children during the school vacation period. A popular solution — with favorable tax consequences — is a day camp program. Unlike overnight camps, the cost of day camp counts as an expense towards the child and dependent care credit. Of course, even if your child care provider is a sitter at your home, you'll get some tax benefit if you qualify for the credit.

You figure the credit on up to $3,000 of expenses, $6,000 for two or more children. The credit rate ranges from 20% to 35% of expenses, depending on your income. The 35% rate applies if your income is under $15,000; the 20% rate, if your income is over $43,000.

Related Items:

• Child Care Credit
• Pub. 503, Child and Dependent Care Expenses (PDF 161K)

Are You Moving this Summer?

If your move is closely related to the start of work at a new job location, you may be able to deduct unreimbursed moving expenses on your federal tax return.  You must also meet certain tests relating to distance and time.

If you're a first-time home buyer, you should know that mortgage interest, “points” paid to obtain the mortgage and real estate taxes are expenses that taxpayers may itemize and deduct to help reduce the amount of taxes owed. Other such expenses include medical costs, certain state and local tax payments, charitable contributions, casualty losses and certain miscellaneous deductions.

If you sell your main home, you may be able to exclude up to $250,000 of gain ($500,000 for married taxpayers filing jointly) from your federal tax return when it's time to do your taxes. To be eligible for this exclusion, your home must have been owned by you and used as your main home for a period of at least two out of the five years prior to its sale.

And don't forget to report your change of address to the U.S. Postal Service and to the IRS, so you can continue to get your tax forms and tax refunds. 

Related Items:

• Tax Tip 2004-77, Are You Moving this Summer? — more detailed tips and pointers
• Pub. 521, Moving Expenses (PDF 144K)
• Form 3903, Moving Expenses (PDF 38K)
• Pub. 530, Tax Information for First-Time Homeowners (PDF 112K)
• Schedule A, Itemized Deductions (PDF 116K)
• Tax Tip 2004-56, Selling Your Home
• Pub. 523, Selling Your Home (PDF 194K)

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