6 Tax Moves to Make Before the Summer is Over

Updated for tax year 2026

Summertime — the days of sun-kissed skin, juicy slices of watermelon, flip-flops, and … taxes? Taxes are probably the last thing on your mind this summer, but it’s actually a smart time to tackle mid-year tax moves like withholding, estimated payments, and childcare documentation.

So, in between firing up the grill, splashing in the pool, and taking family vacations, set aside a few minutes to consider these top summer tax moves to make and save yourself some money next tax season.

At a glance

New federal home energy credits generally ended for installs and qualifying improvements after Dec. 31, 2025.

Summer is a good time for a mid-year tax checkup before the year-end crunch.

Review your Form W-4 withholding and Q3 estimated taxes (due Sept. 15).

Save summer childcare receipts if you plan to claim the Child and Dependent Care Credit.

1. Organize your finances.

If you’re one of those super-organized taxpayers, you’ve probably already marked and filed every receipt since January and carefully tracked your year-to-date income and expenses. You may even know exactly where your taxes currently stand.

However, for those of us who aren’t quite as clerically inclined, we have some catching up to do. But it’s not as difficult to get started as you may think. It’s as simple as doing a little sorting, throwing out things you don’t need, and filing and updating any financial records.

Tackling half a year’s backlog of expenses and receipts at this point in the year will be much easier than waiting until tax time or scrambling to get organized. Plus, you’re much more likely to remember essential details now versus waiting until tax filing or the end of the year.

2. Review your income tax withholding.

Whether you owed a tax bill or got a big tax refund on last year’s federal income tax return, now is the time to review and adjust your income tax withholding if you’d like a different result when you file next year.

You can adjust your withholdings by completing Form W-4, Employee’s Withholding Allowance Certificate.

To make it quick and easy, you can use the TaxAct® Refund Booster (W-4 Calculator).* After answering a few questions about your income and accounting for any potential tax-free contributions to an HSA, IRA, or similar, we will fill out a new Form W-4 for you, which you can print and give to your payroll department.

3. Keep up with estimated taxes.

If you own a business, are part of the gig economy, or have substantial income that isn’t subject to income tax withholding, you may need to pay quarterly estimated taxes. You’ll want to pay close attention to the due dates, as they are not perfectly spaced throughout the year.

For 2026, the third quarterly estimated tax payment is due Sept. 15. If you missed an earlier deadline, you may still owe a penalty — paying what you can now can help limit interest and penalties later. While it may be hard to come up with the money for estimated tax payments every quarter, it can be even harder to pay the entire amount as a lump sum at tax time. Plus, you’ll be held accountable for any applicable penalties and interest for late payments at that time, too.

A good way to keep up with taxes on self-employment and other income is to funnel the necessary money into a separate bank account as it comes in or at least once a month.

4. Remember your summer childcare tax benefits.

Do you send any children under age 13 to daycare during the summer because you work away from home? If so, you may qualify for the Child and Dependent Care Credit. This is different than the Child Tax Credit.

If your child attends daycare, summer camp (day camps only), or receives care at someone’s home, you may be eligible for a tax credit to help offset some childcare costs. Parents who are not working but are attending school or searching for employment may also qualify for this credit.

In most cases, you cannot take this tax credit to offset the costs of tutoring or an overnight camp. To take advantage of this credit, be sure to save any applicable childcare receipts.

5. Hire your kids.

One advantage of owning a business is that you can likely employ your children as long as you follow any applicable labor laws. If there’s something they can do to help, you can pay them and deduct their wages. As a bonus, if your kids are under 18, you don’t have to bother with Social Security and Medicare taxes.

This FICA exemption generally applies if your business is a sole proprietorship or a partnership in which each partner is the child’s parent. If your business is a corporation or another entity type, different payroll tax rules may apply. Before you start paying your kids, check IRS guidance on family employees.

Your kids will be subject to paying taxes on their earnings, but they are almost certainly in a lower income tax bracket than you are. In fact, if they’re just working a few hours in the summer, they may not have any tax liability at all.

6. Be aware of changes to credits for energy-efficient home improvements.

Summer is still a great time for home improvements, but federal tax credits for many energy-efficient upgrades have changed for 2026.

Under the Working Families Tax Cuts (also known as the One Big Beautiful Bill), the Energy Efficient Home Improvement Credit and the Residential Clean Energy Credit no longer apply to property placed in service or to costs incurred after Dec. 31, 2025.

What that means:

If you completed qualifying solar, wind, geothermal, battery storage, doors, windows, or similar upgrades on or before Dec. 31, 2025, you may still be able to claim a credit on your return using IRS Form 5695, Residential Energy Credits.

If you are planning or paying for improvements in 2026, you won’t be able to claim these tax credits — even if you signed a contract or paid a deposit in 2025 and the installation wasn’t completed until 2026.

Tax tip: If you already claimed the Residential Clean Energy Credit for eligible solar, wind, or geothermal property installed on or before Dec. 31, 2025, but could not use the full amount, you may still carry forward the unused portion to future tax years, according to special carryforward rules. (This does not apply to the Energy Efficient Home Improvement Credit.)

Make sure to track and file all applicable receipts and contractor documentation so you are ready at tax time. TaxAct® can help you claim any energy credits you qualify for when you e-file with us.

For the latest rules, see the IRS pages on home energy tax credits and residential clean energy.

FAQs

What tax moves should I make in the summer?

It’s a good idea to review withholding, estimated taxes, childcare receipts, and your financial records while the year is only half over. A mid-year checkup is easier now than scrambling in January, and you may catch issues before they balloon into a bigger tax bill or penalty.

When are Q3 estimated taxes due?

For calendar-year taxpayers, the third quarterly estimated tax payment for 2026 is due Sept. 15, 2026. Estimated tax due dates are not evenly spaced through the year, so mark your calendar if you have self-employment, gig, or other income without withholding.

Can I claim summer daycare or day camp on my taxes?

Yes, you may qualify for the Child and Dependent Care Credit if you paid for care for a qualifying child under age 13 so you (or your spouse) could work or look for work. Day camps often qualify, while overnight camps and things like tutoring usually do not. If you plan to claim this tax break, save your receipts and your provider’s tax ID.

Do energy-efficient home improvements still qualify for a federal tax credit?

For most new projects, no. The Energy Efficient Home Improvement Credit and the Residential Clean Energy Creditended for qualifying work after Dec. 31, 2025, although you may still claim credits for eligible improvements completed on or before that date.

Additionally, if you qualify for the Residential Clean Energy Credit but cannot use the full amount because you owe little or no tax, you may carry forward the unused portion to future years. The Energy Efficient Home Improvement Credit does not allow carryforward — you must use it in the year you claim it or lose the excess.

Should I update my W-4 in the middle of the year?

Yes, if you want a different result at tax time. Updating Form W-4 after a large refund or tax bill can help align your withholding with what you actually owe. You can use the TaxAct Refund Booster (W-4 Calculator) to estimate changes and print a new form for your employer.*

Can I hire my kids for my business and save on taxes?

Often, yes — if the work is legitimate and you follow labor and tax rules. Wages may be deductible for your business, and children under 18 may be exempt from Social Security and Medicare taxes when employed by a parent’s sole proprietorship or qualifying partnership. Other entity types, such as corporations, have different rules.

The bottom line

Summer tax moves don’t have to be complicated! Start by organizing your records, checking your withholding, staying current on estimated taxes, saving childcare receipts, and understanding which credits still apply after recent tax law changes. When you are ready to file, TaxAct can help you find and claim the tax breaks you qualify for on your return.

This article is for informational purposes only and not legal or financial advice.

All TaxAct offers, products and services are subject to applicable terms and conditions.

1Refund Booster may not work for everyone or in all circumstances and by itself doesn’t constitute legal or tax advice. Your personal tax situation may vary.

Citations

Internal Revenue Service. “About Form W-4, Employee’s Withholding Certificate.” IRS.gov, 21 Apr. 2026.Internal Revenue Service. “Publication 503 (2025), Child and Dependent Care Expenses.” IRS.gov, 2025.Internal Revenue Service. “FAQs for Modification of Sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D under Public Law 119-21, 139 Stat. 72 (July 4, 2025), Commonly Known as the One, Big, Beautiful Bill (OBBB).” IRS.gov, 21 Aug. 2025.Internal Revenue Service. “About Form 5695, Residential Energy Credits.” IRS.gov, 30 Mar. 2026.Internal Revenue Service. “Residential Clean Energy Credit.” IRS.gov, 12 Jan. 2026.|Internal Revenue Service. “Energy Efficient Home Improvement Credit.” IRS.gov, 28 Apr. 2026.Internal Revenue Service. “Home Energy Tax Credits.” IRS.gov, 29 June 2026.Internal Revenue Service. “Family Employees.” IRS.gov, 10 Oct. 2025.TaxAct. “Refund Booster (W-4 Calculator).” TaxAct.com. Accessed 1 July 2026.TaxAct. “How to Calculate and Make Estimated Tax Payments.” TaxAct Blog, 3 Sept. 2025.Ponder, Meghen. “Are Daycare Expenses Tax-Deductible? Understanding the Child and Dependent Care Credit.” TaxAct Blog, 29 Sept. 2025.Ponder, Meghen. “5 Tax Tips for Homeowners.” TaxAct Blog, 19 Sept. 2025.Ponder, Meghen. “Comprehensive Guide to Filing Taxes as a Gig Worker.” TaxAct Blog, 24 July 2025.Ponder, Meghen. “Guide to Filling Out Form W-4: How to Keep More Money in Your Paychecks.” TaxAct Blog, 1 Oct. 2025.

Source link