Summer Tax Planning For Working Parents

Working parents, over the summer, may need to pay for the care of their children. A reminder when planning the summer agenda to keep in mind a tax credit that can help offset some day camp expenses.

Here are six summer tips for working parents about the Child and Dependent Care Tax Credit:

1.  Children must be under 13 to qualify.

2.  You may qualify for the credit whether you pay for care at home through a sitter, a daycare facility outside the home, or at a day camp.

3.  The credit can be up to 35 percent of your expenses (depending on income).

4.  Expenses for overnight camps or summer school tutoring DO NOT qualify.

5. You may use up to $3,000 of unreimbursed expenses paid in a year for one qualifying person or $6,000 for two or more qualifying persons.

6. Keep good records & receipts to use to file your 2013 tax return next year.Be sure to note the name, address, EIN or Social Security number of the provider as well as location and the dated attended.

 Don’t forget the Child and Dependent Care Tax Credit is available throughout the year.  The credit is also available for elderly care and for those physically or mentally incapable of self-care. There are also provisions for full-time students or those actively looking for work.

Be aware that, if you pay for care in your home, you may be household employer—a complex area.

For more details, check out IRS Publication 503. Our office is also more than happy to council you.

By:  John J. Kasperek, Enrolled Agent.

John has ran his own practice for over 25 years and enjoys passing on his expertise to the public…….