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 Child and Dependent Care Credit can help you save on your taxes
Author: Pete Glocker
Website: http://www.dmcccorp.org
Added: Fri, 11 Nov 2005 15:44:44 -0500
Category: Home Business & Wealth Generation
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Copyright 2005 Debt Management Credit Counseling Corp.
The cost of raising a child is elevating every day. Paying for baseball leagues, dance lessons, day care, clothing, food and school supplies can add up to be a large sum of money. On the other hand, if you are caring for a parent, a spouse or any other dependent that are physically or mentally incapable of caring for themselves can also add up to be a large sum of money. If you are in either one of these categories, the IRS has a child and dependent care tax break for you to save money on your income tax.
According to the IRS website, this credit is available to people who, in order to work or to look for work, have to pay for child care services for dependents under age 13. The credit is also available if you paid for care of a spouse or a dependent of any age that is physically or mentally incapable of self care. “Many people do not know on how many different ways they can save money on their taxes,” said Jayson French, a tax practitioner for Palm Beach Tax Center. “Child and Dependent Care Credit can be very helpful for parents that have to pay for daycare and other work related expenditures.”
The tax credit is a percentage, based on your gross income will cover work related child and dependent expenses. For example, if your child needs after-school care because you work until 6 p.m., you will fit in this category. Conditions that apply:
- You must have earned income from wages, salaries, and tips or other taxable employee compensation, or net earnings from self-employment. If you are married, both you and your spouse must have earned income, unless one spouse was either a full-time student or was physically or mentally incapable of self-care.
- The payments for care cannot be paid to someone you can claim as your dependent on your return or to your child who is under age 19.
- Your filing status must be single, head of household, qualifying widow(er) with a dependent child, or married filing jointly.
- The care must have been provided for one or more qualifying persons identified on the form you use to claim the credit.
- You (and, if you are married, your spouse) must maintain a home that you live in with the qualifying child or dependent.
For more information, go to http://www.irs.gov/newsroom/article/0,,id=106189,00.html
View all Pete Glocker's articles
About the Author:
This topic was researched and compiled by Barbara Lafferty, a certified financial counselor at Debt Management Credit Counseling Corp (DMCC) in Boca Raton, FL. The article was edited by Pete Glocker of DMCC. Pete Glocker is employed in the Education and Charitable Services Department at Debt Management Credit Counseling Corp. (“DMCC”), a 501c(3) non-profit charitable organization located in Boca Raton, Florida. Pete graduated from Florida Atlantic University with a BA in Multimedia Journalism and is an experienced web producer for Tribune Interactive products Sun-Sentinel.com and SouthFlorida.com. DMCC provides free financial education, personal budget counseling, and debt management plans to consumers across the United States. Debt management plans offered by DMCC help consumers relieve the stress of excessive debt by reducing credit card interest rates, consolidating and lowering monthly payments, and stopping collection calls and late fees. DMCC financial counselors can be reached for free education materials, budget counseling and debt management plan quotes by calling 800-863-9011 or by visiting http://www.dmcccorp.org . Pete Glocker can be reached by email at pete@dmcccorp.org
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