How To Write Off Johnny’s Soccer Camp
Finding hidden gems in the tax code.
St. Cloud, MN, July 2012: Alright, brace yourself ... this could get slightly complicated. But it’s very do-able, as are many things like this in the tax code (which you’d never believe). Local tax expert Arnold Kahara, CPA is going to cut through the tax jargon, and give you the bottom line.
“If your child is younger than 13 and he/she wants to go to day camp (overnight doesn’t count!) and you are both working and/or ‘looking for work’ ... Cha-ching. You then have a choice -- you can pay for camp using a FSA (Flexible Savings Account) OR it can give you a child care tax credit (better than a deduction). With both the FSA and the child care credit, other eligible expenses include the cost of day care or preschool, before-school care or after-school care, and a nanny or other babysitter while you work,” Kahara said.
The size of the credit depends on your income and the number of children you have who are younger than 13. You can count up to $3,000 in child care expenses for one child or up to $6,000 for two or more children. But the size of the credit gradually decreases as income increases. Families earning less than $15,000 can claim a credit for up to 35% of those eligible expenses; families earning more than $43,000 can claim a credit for up to 20% of eligible costs.
“All told, it’s a good deal which you should be leveraging, if you qualify. For most people, it’s a better deal to use the money from the FSA than to claim the child care credit. But if you have two or more children and your child care expenses exceed $5,000 for the year, you can benefit a bit from both accounts. To do this you can set aside up to $5,000 in pretax money in your FSA for child care costs, then claim the child care credit for up to $1,000 in additional expenses,” Kahara said.
Just counting $1,000 toward the child care credit could cut your tax bill by at least $200.
“This is just the tip of the iceberg. There really are two tax systems in our country--one for those who know this stuff and use it, and another, much harsher one for those who don’t,” Kahara said.
Arnold Kahara, CPA offers tax planning and preparation for businesses and individuals, payroll services, QuickBooks consulting, and monthly accounting services. Give him a call (320) 252-4259, email email@example.com or visit his website http://stcloudmntaxpreparation.com.
- Contact Information
- Arnold A. Kahara
- Arnold A. Kahara, CPA, LTD
- (1) (320) 252-4259
This news content may be integrated into any legitimate news gathering and publishing effort. Linking is permitted.
News Release Distribution and Press Release Distribution Services Provided by WebWire.