August 1, 2019
With all the tax law changes this year, be sure that you are getting your just deductions in the coming tax season. That is, qualifying deductions that fall under the Child and Dependent Care Credit. According to tax giant and trusted resource Intuit, here’s the skinny…
If you paid a daycare center, babysitter, summer camp or other provider to care for a qualifying child under age 13 or a disabled dependent of any age, you may qualify for a tax credit of up to 35 percent of qualifying expenses—up to $3,000 for one child or dependent or up to $6,000 for two or more children or dependents.
The Child and Dependent Care Credit is designed to assist working parents and guardians with some of the expenses involved in raising a child or caring for a disabled dependent. To qualify, you must meet several criteria, including the following:
Qualifying expenses for the Child and Dependent Care Credit
Most know that daycare fees qualify for the Child and Dependent Care Credit. However, qualifying expenses often overlooked include childcare provided by a babysitter or licensed dependent care center…as well as the cost of a cook, housekeeper, maid or cleaning person who provides care for the child or dependent.
Other qualifying expenses include day camp or summer camp fees. Even camps centered around a sport or activity qualify if the camp was selected to provide care while the parent or parents were at work. Please note that overnight camps do NOT qualify.
Additional qualifying expenses include costs related to before- and after-school care for children under the age of 13 and expenses related to a nurse, home care provider or other care provider for a disabled dependent. Keep in mind that expenses related to schooling or tutoring are not qualifying expenses.
Because every family is different, be sure to check with your advisor on IRS exceptions. Here’s hoping your summer is fun and festive so far!
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We who live in North Alabama know our weather. The meteorological phenomena mean we are well versed in the vocabulary of watches, warnings, El Niño, and microbursts. But knowledge without action is useless. Leverage the Alabama Department of Revenue's sales tax holiday for Severe Weather Preparedness to take action and save on supplies and other items to ready for the upcoming storm season.
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A major change took effect at the start of 2020 that many taxpayers may not notice for some time. A new form W-4, which indicates how much to withhold from an employee's paycheck, is now in effect. The more complicated form aims to increase accuracy of withholding - diminishing large refunds and aligning more closely the tax withheld with the tax liability on an individual's 1040. But, the greater complexity is sure to raise questions from employees with their employers. The IRS has a tool to help employees fill it out, but gone are the days of listing filing status and number of exemptions.