Are Summertime Expenses Tax Deductible?
If you send your kid(s) to a summer camp(s) or day care facility, you might be able to deduct those costs by claiming dependent care expense tax credit. Because you and your spouse work or are looking for work, you must arrange to care for your child(ren) under 13 years of age during the school vacation. So camp might be a good tax deduction for you. You can claim the child and dependent care expense credit on your personal income tax return. Here are few facts that you should know about this tax credit.
• If you paid for an overnight camp, you cannot deduct it; those expenses do not qualify for this credit.
• If you bring your child to a daycare facility outside your home you can deduct it and claim this tax credit.
• Unfortunately, there is a limit of how much you can deduct. Presently only $3,000 of the qualified child care expenses paid during the year for one qualifying individual or $6,000 for two or more qualifying individuals is allowed for this credit.
• Depending on your income, you can deduct up to 35 percent of your qualifying child care expenses (see limits above) and the lowest deduction would be 20 percent for the high income earners. For example: you have one child and you spent $5,000 on a summer camp, only the $3,000 will be deductible. Then you will need to multiply that 3,000 by your income percentage; let’s say its 35%, so the actual tax credit that you can claim on your personal income tax return would be $1,050 (3,000 X .35).Personal Tax ArticlesThis article was written by TaxBizPro, LLC 2023, all rights reserved ©.
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