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Tax
Tidbit #4
How
to Let the IRS Pay for Your Kids' Summer Camp
by
Wayne Davies, EA
When summer
day-camp season comes around, here's a way to let Uncle Sam pick
up the tab for your children's fun.
Many parents
take advantage of the child daycare credit. Well, this same credit
can also be used for summer day-camp expenses.
The
child-care credit applies to expenses you incur for the care of
children under age 13 while the parents are working. And
"working" applies to both an employee job as well as
self-employment.
Sending your
child to a day-camp during the summer counts as a qualified
expense for purposes of the child-care credit.
And by
"day-camp", don't limit yourself to the traditional
YMCA-type scenario. There are plenty of other programs that
qualify, such as:
1. Sports
camps: Soccer camp, baseball camp, basketball camp, football camp,
volleyball. These all count.
2. Academic
camps like computer camp or other scholarly pursuits.
3. Fine arts
camps for music, drama, and art.
Kids (and
parents!) sure have a lot of choices these days.
The key
requirement for getting the day-care credit is that the camp not
be a sleep-over camp. The child must only spend time there during
the day.
You take the
credit on Form 2441, Child and Dependent Care Expenses. The amount
of your credit depends on your income. Take a peak at Form 2441 to
calculate your credit:
First, find
your adjusted gross income (AGI) on Form 1040. For many folks, your credit is likely to be 20% of
the day-camp expense.
(The credit amount depends on your income, so check Form 2441 to
determine the exact credit amount for you.)
Next, you
multiply the day-camp expense by 20%, and that's the potential tax
credit amount. I say "potential" because there's one
more step to complete the calculation -- if your income is greater
than $43,000, your maximum
childcare
credit is $600 if you have one child and $1,200 if you have two or
more children with daycare expenses.
So, if you
have $1,000 of day-camp expense this summer, you get a $200 tax
credit on your personal income tax return.
Two-hundred
bucks . . . now there's a tasty little morsel!
To access
Form 2441, visit:
http://www.irs.gov/pub/irs-pdf/f2441.pdf
Tax
Tidbit #1: http://www.YouSaveOnTaxes.com/tax-tidbit-1.html
Tax
Tidbit #2: http://www.YouSaveOnTaxes.com/tax-tidbit-2.html
Tax
Tidbit #3: http://www.YouSaveOnTaxes.com/tax-tidbit-3.html
Tax
Tidbit #4: http://www.YouSaveOnTaxes.com/tax-tidbit-4.html
Tax
Tidbit #5: http://www.YouSaveOnTaxes.com/tax-tidbit-5.html
Have
you heard about the recent tax law change that turned a small
business loophole into a crater?
http://www.YouSaveOnTaxes.com/tax-crater.html
Want
to know the biggest tax mistake you can ever make? (And how
to avoid it?)
http://www.YouSaveOnTaxes.com/tax-mistake.html
Do
you know why the most important business decision you
probably never made is the key to paying thousands less in taxes?
http://www.YouSaveOnTaxes.com/tax-decision.html
About The
Author:
Wayne
M. Davies is author of three tax-slashing eBooks for small
business owners and the
self-employed:
** The Tax Reduction Toolkit **
29
little-known but perfectly legal strategies to reduce your taxes,
postpone your taxes, and even avoid taxes altogether -- for small
biz owners & self-employed people only!
http://www.TaxReductionToolkit.com
**
Incorporation Tax Secrets Revealed **
How to save thousands in taxes by
forming a corporation or LLC for your small business or
self-employment activity. Discover the #1 Tax Secret of the Rich!
http://www.IncorporationTaxSecrets.com
**
How To Incorporate Yourself For Free **
How to
avoid paying $500, $1000, $1500 or more in lawyer fees by
incorporating your small business all by yourself...for FREE!
http://www.HowToIncorporateForFree.com
Wayne's eBooks are available separately, or
at a discount as a 3-volume set:
**
The Ultimate Small Business Tax Reduction Guide **
Find out just how easy (and legal) it is to reduce your
taxes by $2,000...$3,000...$4,000 or more!
http://www.SmallBusinessTaxReductionGuide.com
To
receive a free copy of Wayne's 25-page Special Report,
"How
To Instantly Double Your Deductions"
click
here:
http://www.YouSaveOnTaxes.com
www.YouSaveOnTaxes.com
A
Division of Wayne M. Davies Inc.
4660
W. Jefferson Blvd., Suite 220
Fort
Wayne, IN 46804
(260) 459-3858
Wayne@YouSaveOnTaxes.com
http://www.YouSaveOnTaxes.com
http://www.MagneticMarketing.biz
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