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/taxtopics/tc602.html.
DMCC is a 501 (c)3 is a charitable organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with their debt. Education is provided free of charge to consumers as well as personal counseling to identify the best options for the repayment of any unsecured debt. To speak to a certified credit counselor, call 1-954-418-1466, email contact@dmcconline.org.
DMCC is located at 700 West Hillsboro Blvd., Building 1, Suite 105, Deerfield Beach, FL 33441.
