During the summer months there are several tax-free benefits you can take advantage of! From yard sales to hiring your children for the summer you are sure to find something below useful.
Yard Sales:
Summer is the perfect time to clean out your home and have a yard sale! But have you ever wondered if you need to pay taxes on the income? Since the items tend to sell for much less than what you paid for them, the transaction is tax-free. Usually if you only have a yard sale or set up at a flea market/farmer’s market once or twice a year it is tax-free. However, if you set up on a regular basis, you need to pay taxes on that income.
Hiring Your Children:
If you are self-employed, you can hire your child this summer and take advantage of some payroll tax benefits! If your child is under the age of 18, you are not required to withhold social security and Medicare taxes from their pay. You also don’t need to pay federal unemployment taxes on their wages until they are 21.
If you and your spouse own a company, that is a partnership, you may also qualify for these benefits. However, if your business is a corporation, your child is considered an employee under the corporation and is subject to the normal payroll taxes, regardless of their age.
Renting Out Your Home:
Is your home located in a popular tourist area? If so, did you know you can rent out your home for a few days and earn some tax-free income?!?
Taxpayers who own their personal residence and rent it out for less than 15 days during the year receive some tax-free rental income. To qualify for this benefit, you must live in your residence for more than 15 days in a year and only rent it out for 14 days or less in a calendar year.
If you have any questions about these or any other tax benefits, please don’t hesitate to call me at 610-775-9216.