Think of taxes during the summer

| 22 Feb 2012 | 08:47

    Before you start a summer job, take a vacation, or send the children off to day camp, the Internal Revenue Service wants you to know that certain summertime activities may qualify you for tax breaks. Here are some tips from the IRS that may help you lower your taxes and avoid problems at tax time. Summer day camp may reap tax benefit Many working parents must arrange for care of their younger children under 13 years of age during the school vacation period. A popular solution — with a favorable tax benefit — 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 childcare provider is a sitter at your home, you’ll get some tax benefit if you qualify for the credit.. Make sure summer employer classifies you correctly Summer workers sometimes are misclassified as independent contractors (self-employed) rather than as employees. Employers who do this usually fail to withhold taxes from the worker’s wages, often leaving the worker responsible at tax time for paying income taxes plus Social Security and Medicare taxes. Workers can avoid higher tax bills and lost benefits if they know their proper status. 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 2009 income will not be over $5,700; your unearned income (interest, dividends, etc.) will not exceed $300; and, you had no income tax owed for . 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. Free tax assistance services Call the IRS tax help line at-800-829-1040, to get answers to your federal tax questions. To order free forms, instructions and publications call800-829-3676).