Holiday season requires parents to ship their children off to daycare for a few hours, until they come back from work. Most parents require the services of a daycare during the holiday season, as school’s out and they need someone to watch their children while they are occupied with work or holiday shopping.
Parents unable to get time off work during children’s vacation will need to drop their little ones at a daycare. The only downside to sending your kids to daycare is the expense. Daycare center charge more money to customers who are not their regular clients. Do not fret over the high costs because you can save money when you file your income tax in Kissimmee.
How Can Holiday Daycare Save You Money?
When you file your income tax in Kissimmee, take advantage of the child and dependent care credit. Child and dependent care credit allows you to reduce your income tax by claiming money against your salary. The amount you will be able to claim depends on how much you earn. Here is an example of how child and dependent care credit works:
- It works on a sliding scale based on your salary
- The maximum credit you can claim for daycare is 35%
- If you earn $43,000 and more, 20% will be the maximum credit
Individuals will need to provide the Internal Revenue Service (IRS) with the receipt from the daycare along with their address and Social Security Number or Employer Identification Number. However, there are some limitations to making this claim.
What Are the Limitations of the Child and Dependent Care Credit?
Here is a list of limitations:
- You can only take out this credit if you have income tax liability when you file your income tax in Kissimmee.
- You cannot claim the credit if your filing status states you are married.
- Your children should be younger than 13.
- You can only take out the credit if you earn a salary or are actively searching for a job.
- If you receive reimbursements from your employer, it will reduce the childcare costs.
When you file your income tax in Kissimmee, you need to make sure you qualify for child and dependent care credit. In the event you are unsure if you qualify, you can always ask the help of a qualified accountant to help you determine your eligibility. Remember this when you file your income tax in Kissimmee. In addition to this, ask your employer if they offer employer’s dependent care accounts.
What is Employer’s Dependent Care Accounts?
Employers who provide their employees with a flexible account to spend money allow workers to allocate about $2,500 into the account. Married people can allocate about $5,000 into the account. You can set up the account at the start of the New Year if you have not done it already. It will help you pay for daycare during holiday season.
When you file your income tax in Kissimmee, you will have the knowledge of knowing that you can save money on your income taxes. You can also request the help of a certified public accountant to help you file your income tax in Kissimmee.
For more information about our income tax services please call us at 407-344-1012, or email us at [email protected].