May 1, 2018
Summer will be here before you know it! If you are a working parent with school-aged children, you know that it can also mean pretty steep bills for childcare and summer camp. However, you may be able to soften the hit to your family’s budget if these services qualify for the Child and Dependent Care Tax Credit.
This credit reduces your tax liability dollar for dollar when you deduct the cost of day care provided by a day camp, day care, preschool, babysitter or nanny. Keep in mind, expenses for sleep away camps and tutoring are not eligible for this tax credit.
Here are the other qualifications for deducting the cost of these services on your next tax return:
Another note: You cannot double dip between a dependent care flexible spending account (DCFSA) and the childcare tax credit for the same expenses. However, if you have maxed out funds from your DCFSA, you can use the tax credit up to the limit for any additional childcare expenses.
For more information on the Child and Dependent Care Tax Credit contact our firm.
Many businesses use independent contractors to help keep their costs down. If you’re among them, make sure that these workers are properly classified for federal tax purposes. If the IRS reclassifies them as employees, it can be a costly error.
What do accountants do with themselves after tax season? Actually, the same thing they do during busy season: They work hard for their clients. The only difference is that instead of cranking out tax returns, they help clients work through other aspects of their financial health—including issues revealed during the yearly tax return process.
The premium tax credit (PTC) is a refundable credit that helps individuals and families pay for insurance obtained from a Health Insurance Marketplace (commonly known as an “Exchange”). A provision of the Affordable Care Act (ACA) created the credit.