If you pay for child care, you know how costly it can be. That’s why it’s important to understand how the Child and Dependent Care Tax Credit can reduce the taxes you pay. Review these 10 facts from the IRS about this potential tax credit to see which ones might apply to you!
Child care is an area where we often identify missed deductions among our clients. While most people understand that “daycare” is deductible, they often don’t realize that preschool costs, summer camps and “parents day out” programs may be as well. All of these expenses are deductible child care costs.
Another point that is regularly overlooked is related to kindergarten. If you pay for all-day kindergarten, that is also considered child care if the school district only provides for half-day kindergarten for normal enrollment.
For each of these deductions, you will need documentation from the child care provider (or school). This should be in the form of a statement that documents the total of all costs paid per child, the address of the facility, the telephone number and the provider’s federal tax ID number.
If you’re unsure about the deductions in this category you might be eligible for, scheduled an appointment with us today by calling (913) 888-9100. We can review your situation together to maximize the deduction (or reduce the payment) on your taxes.
Richard Adams is a graduate of Benedictine College in Atchison, Kansas, with dual majors in Accounting and Business Administration. He is also a graduate of Wentworth Military Academy in Lexington, Missouri.