Dependent Care This Summer: What You Should KnowJuly 5th, 2014
Summer is in full swing here in Tucson, and for families with dependent children, that means the kids are out of school and on summer vacation. While your kids are probably excited about having time off from the classroom, you may not have the same luxury. Parents still have to work during the summer, which means that you must find some way for your children to be taken care of while you’re at the office or looking for a job. Keep reading to learn about what you should know about dependent care and your finances.
Child Care and Dependent Credit
No matter what your child is interested in, you can probably find a summer camp to foster his curiosity about an activity or certain subject. Many parents enroll their children in day care or summer camps while they are at work in the summertime, but not everyone knows that you might be able to get a federal tax credit for those costs. The IRS has specific rules about who qualifies for this credit, so ask your accountant about making sure that you meet the requirements.
One of the most important things to know about the federal tax credit for child and dependent care is that your expenses have to be work-related. That is, you must be able to show that you are paying for child care because you are working or actively looking for work. Children under 13 usually qualify for the credit, and the credit is applicable for more than one dependent.
Parents and guardians may be surprised to find out that they can get back as much as 35 percent of the amount they spend on dependent care. The credit you get back is based on your income, and the limit for one dependent is $3,000 per year. Remember that if you pay for care throughout the year, you can earn credit as the program is not just for the summer.
Save money this summer and year-round with the help of The CPA Firm of Flowers, Rieger & Associates, P.L.L.C. We are a professional tax preparation firm who specializes in helping small businesses and individuals, and our staff averages over 30 years of accounting and tax experience each. Call us at (520) 327-8706 to learn how we can help you save money with various tax credits.