Check out tax breaks now for savings later

And you thought you could have the summer off with no tax issues to think about. Fuhgeddaboutit.

In many cases, however, some summertime moves could land you some welcome tax breaks.

For example, working teenagers or college students should be careful how they fill out their W-4 forms for their summer jobs to avoid having too much tax withheld. No point in them giving their money to the government when I know they could use it now.

Here’s the deal. You may be exempt from tax withholding if you can be claimed as a dependent (usually on a parent’s return), your total 2006 income will not be over $5,150, unearned income (interest, dividends, etc.) will not exceed $300, and you had no income tax owed for 2005, according to IRS spokesman Jim Dupree.

“This is the time to be mindful of your child’s tax situation and fix it so taxes aren’t taken out,” Dupree said.

To claim exemption from withholding, you generally would need to have had no tax liability the previous year and expect none in the current year.

However – and isn’t there always one with the IRS? – your child will still have to pay Social Security and Medicare taxes.

To make sure your child doesn’t have taxes withheld that don’t need to be withheld, have him or her read the W-4 carefully before filling it out.

Actually, it’s better to sit down with your child before he or she starts work to go over how to fill out the form. Go online to Then search for Form W-4, “Employee’s Withholding Allowance Certificate.” You will see that if your child is exempt, only lines 1, 2, 3, 4 and 7 need to be filled out.

This might be a good time to also have a conversation about reporting all taxable income. If your child earns tips in his or her summer job, those tips are taxable and must be reported.

If you’re getting married this summer, you might want to fill out a new W-4 form. That change in your martial status could mean more money in your paycheck.

Don’t forget that if you send your child or children (under age 13) to summer camp, the cost may count as an expense toward the Child and Dependent Care Credit.

You can claim the credit if you have to put your child or children in summer camp programs so that you (and your spouse if filing a joint return) can go to work or look for work. This is no different than when you pay for child care during the school year so you can work. It doesn’t matter if the kid is having more fun in the summer. Your fun is getting the tax benefit if you qualify.

“Make sure you get receipts from the camp,” Dupree said.

You will also need to get the correct name and address of the camp provider and the organization’s or business’s tax identification number.

Moving this summer because of a change in your job location or for a new job?

If so, don’t forget that your moving expenses may be deductible.

College graduates pay close attention.

To qualify for the moving expense deduction, you must meet a distance and time test, unless you are a member of the armed forces and your move was caused by a permanent change of station.

Let’s look at the distance test first. Your move will meet the distance test if your new job is least 50 miles farther from your former home than your old job location.

To determine this, the IRS says, first figure the distance between your old home and your new job and then subtract the distance between that residence and your old job. If the result is 50 miles or more, you have met the distance test.

The second test is time. You have to work full time for at least 39 weeks (it doesn’t have to be the same job) during the 12 months right after you move, according to the IRS. If you are self-employed, you must work full time for at least 39 weeks during the first 12 months and for a total of at least 78 weeks during the first 24 months after you move.

There are exceptions to the time test such as disability.

You can also deduct the expenses of traveling to your new home, including your lodging expenses. You cannot, however, deduct meals.

And don’t try to get slick about this deduction. No double-dipping on this deduction. You cannot deduct moving expenses that were reimbursed by your employer. In fact, some moving expenses reimbursed by your employer may be taxable income.

For more specifics about what moving expense are deductible refer to IRS Publication 521, “Moving Expenses.”

All these tips are just a midyear reminder that you should be mindful of the many things that can help you save on your taxes.

Washington Post Writers Group

Talk to us

More in Herald Business Journal

FILE - In this Monday, March 23, 2020, file photo, a worker walks near a mural of a Boeing 777 airplane at the company's manufacturing facility in Everett, Wash., north of Seattle. Beginning in 2024, some 737 planes will be built in Everett, the company announced to workers on Monday. (AP Photo/Ted S. Warren, File)
With 747 out, Boeing to open new 737 Max line at Everett’s Paine Field

Since the last 747 rolled out of the factory, speculation has been rife that Boeing might move some 737 Max production to Everett.

IonQ will open a new quantum computing manufacturing and research center at 3755 Monte Villa Parkway in Bothell. (Photo courtesy of IonQ)
Quantum computing firm IonQ to open Bothell R&D center

IonQ says quantum computing systems are key to addressing climate change, energy and transportation.

Nathanael Engen, founder of Black Forest Mushrooms, sits in the lobby of Think Tank Cowork with his 9-year-old dog, Bruce Wayne, on Friday, Jan. 27, 2023, in downtown Everett, Washington. (Ryan Berry / The Herald)
Growing green mushrooms in downtown Everett

The founder of Black Forest Mushrooms plans to grow gourmet mushrooms locally, reducing their carbon footprint.

Barb Lamoureux, 78, poses for a photo at her office at 1904 Wetmore Ave in Everett, Washington on Monday, Jan. 23, 2023. Lamoureux, who founded Lamoureux Real Estate in 2004, is retiring after 33 years. (Annie Barker / The Herald)
Barb Lamoureux, ‘North Everett’s Real Estate Agent’ retires

A longtime supporter of Housing Hope, Lamoureux helped launch the Windermere Foundation Golf Tournament.

AGC Biologics in Bothell to produce new diabetes treatment

The contract drug manufacturer paired with drug developer Provention Bio to bring the new therapy to market.

FILE - In this file photo dated Monday, March 11, 2019, rescuers work at the scene of an Ethiopian Airlines plane crash south of Addis Ababa, Ethiopia.  The number of deaths in major air crashes around the globe fell by more than half in 2019 according to a report released Wednesday Jan. 1, 2020, by the aviation consultancy To70, revealing the worst crash for the year was an Ethiopian Airlines Boeing 737 MAX on March 10 that lost 157 lives. (AP Photo/Mulugeta Ayene, FILE)
US board says Boeing Max likely hit a bird before 2019 crash

U.S. accident investigators disagree with Ethiopian authorities over the cause of a 2019 Boeing 737 Max crash.

Store owner Jay Behar, 50, left, and store manager Dan Boston, 60, right, work to help unload a truck of recliners at Behar's Furniture on Monday, Jan. 16, 2023. Behar's Furniture on Broadway in Everett is closing up shop after 60 years in business. The family-owned furniture store opened in 1963, when mid-century model styles were all the rage. Second-generation owner, Jay Behar says it's time to move on. (Annie Barker / The Herald)
Behar’s Furniture in Everett closing after 60 years

“It’s time to move on.” The small family-owned store opened in 1963 and grew to cover an entire city block.

Katy Woods, a Licensed Coach, Branch Manager, and experienced Banker at Coastal Community Bank.
Coastal Community Bank Offers Classes for Businesses

To support local business owners and their teams, Coastal offers complimentary Money… Continue reading

Innovative Salon Products online fulfillment employees, from left, Stephanie Wallem, Bethany Fulcher, Isela Ramirez and Gretchen House, work to get orders put together on Friday, Jan. 6, 2023, at the company’s facility in Monroe, Washington. The company began including pay, benefits and perks to its job listings over a year ago, well ahead of the new statewide mandate to include a pay range on job postings at companies with over 15 employees. (Ryan Berry / The Herald)
New state law requires employers to give pay range in job postings

Washington’s new pay transparency law aims to narrow wage gaps based on race or gender — though some companies may seek loopholes.

Paddywack co-owner Shane Somerville with the 24-hour pet food pantry built by a local Girl Scout troop outside of her store on Tuesday, Dec. 20, 2022 in Mill Creek, Washington. (Olivia Vanni / The Herald)
An out-paw-ring of support: Mill Creek pantry feeds pets, day or night

With help from local Girl Scouts, the Mill Creek pet food store Paddywack is meeting the need for pet supplies in a pinch.

Kelly Cameron is the woodworker behind Clinton-based business Turnco Wood Goods. (David Welton)
Whidbey woodworkers turn local lumber into art

In the “Slab Room” at Madrona Supply Co., customers can find hunks of wood native to the south end of Whidbey Island.

Siblings Barbara Reed and Eric Minnig, who, co-own their parent’s old business Ken’s Camera along with their brother Bryan, stand outside the Evergreen Way location Thursday, Dec. 15, 2022, in Everett, Washington. After five decades in business, Ken’s will be closing its last two locations for good at the end of the year. (Ryan Berry / The Herald)
Print it or lose it: Ken’s Camera closes after decades caught on film

The local legend, processing film photos since 1971, will close its locations in Mount Vernon and Everett at the end of 2022.