While you’re hard at work each day, you rely on somebody else to care for your child or another individual who lives with you and depends on you. In this situation, you just might be able to take advantage of the federal government’s dependent/child care credit. This tax credit may very well decrease your annual tax bill by a few hundred or even a few thousand dollars, according to recent tax audit reviews.
The tax credit for dependent and child care (up to $3,000 for one dependent or $6,000 for two dependents or more) is designed for parents and caretakers who work, as child care can be extremely expensive. The purpose of the credit is to enable parents to continue working without having to place too much pressure on their budgets.
One of the biggest benefits of this credit is that it is actually a credit versus just a deduction. Tax deductions decrease the income amounts that people pay on, but tax credits directly decrease their taxes. For example, a tax credit of $1,000 will trim the tax amount you owe by $1,000.
Another chief benefit of the dependent and child care credit is that your eligibility for this credit is not based on income. This is a big deal considering that many tax breaks come with income limits. With the tax credit for dependent and child care, people with higher incomes might not get as huge of a break as those with lower incomes, but at least the credit won’t disappear altogether.
Your child must be no older than 12 (or disabled) for you to take advantage of this credit. In addition, the person who took care of this child could not have been your spouse or an ex who is the child’s other parent. Likewise, this person cannot be anybody else whom you are claiming as a dependent when you file taxes, or the child’s older sibling.
Tax Audit Reviews: Dependent/Child Care Expenses
While you’re hard at work each day, you rely on somebody else to care for your child or another individual who lives with you and depends on you. In this situation, you just might be able to take advantage of the federal government’s dependent/child care credit. This tax credit may very well decrease your annual tax bill by a few hundred or even a few thousand dollars, according to recent tax audit reviews.
The tax credit for dependent and child care (up to $3,000 for one dependent or $6,000 for two dependents or more) is designed for parents and caretakers who work, as child care can be extremely expensive. The purpose of the credit is to enable parents to continue working without having to place too much pressure on their budgets.
One of the biggest benefits of this credit is that it is actually a credit versus just a deduction. Tax deductions decrease the income amounts that people pay on, but tax credits directly decrease their taxes. For example, a tax credit of $1,000 will trim the tax amount you owe by $1,000.
Another chief benefit of the dependent and child care credit is that your eligibility for this credit is not based on income. This is a big deal considering that many tax breaks come with income limits. With the tax credit for dependent and child care, people with higher incomes might not get as huge of a break as those with lower incomes, but at least the credit won’t disappear altogether.
Your child must be no older than 12 (or disabled) for you to take advantage of this credit. In addition, the person who took care of this child could not have been your spouse or an ex who is the child’s other parent. Likewise, this person cannot be anybody else whom you are claiming as a dependent when you file taxes, or the child’s older sibling.
Tax Audit Reviews: Dependent/Child Care Expenses
While you’re hard at work each day, you rely on somebody else to care for your child or another individual who lives with you and depends on you. In this situation, you just might be able to take advantage of the federal government’s dependent/child care credit. This tax credit may very well decrease your annual tax bill by a few hundred or even a few thousand dollars, according to recent tax audit reviews.
The tax credit for dependent and child care (up to $3,000 for one dependent or $6,000 for two dependents or more) is designed for parents and caretakers who work, as child care can be extremely expensive. The purpose of the credit is to enable parents to continue working without having to place too much pressure on their budgets.
One of the biggest benefits of this credit is that it is actually a credit versus just a deduction. Tax deductions decrease the income amounts that people pay on, but tax credits directly decrease their taxes. For example, a tax credit of $1,000 will trim the tax amount you owe by $1,000.
Another chief benefit of the dependent and child care credit is that your eligibility for this credit is not based on income. This is a big deal considering that many tax breaks come with income limits. With the tax credit for dependent and child care, people with higher incomes might not get as huge of a break as those with lower incomes, but at least the credit won’t disappear altogether.
Your child must be no older than 12 (or disabled) for you to take advantage of this credit. In addition, the person who took care of this child could not have been your spouse or an ex who is the child’s other parent. Likewise, this person cannot be anybody else whom you are claiming as a dependent when you file taxes, or the child’s older sibling.
Tax Audit Reviews: Dependent/Child Care Expenses
While you’re hard at work each day, you rely on somebody else to care for your child or another individual who lives with you and depends on you. In this situation, you just might be able to take advantage of the federal government’s dependent/child care credit. This tax credit may very well decrease your annual tax bill by a few hundred or even a few thousand dollars, according to recent tax audit reviews.
The tax credit for dependent and child care (up to $3,000 for one dependent or $6,000 for two dependents or more) is designed for parents and caretakers who work, as child care can be extremely expensive. The purpose of the credit is to enable parents to continue working without having to place too much pressure on their budgets.
One of the biggest benefits of this credit is that it is actually a credit versus just a deduction. Tax deductions decrease the income amounts that people pay on, but tax credits directly decrease their taxes. For example, a tax credit of $1,000 will trim the tax amount you owe by $1,000.
Another chief benefit of the dependent and child care credit is that your eligibility for this credit is not based on income. This is a big deal considering that many tax breaks come with income limits. With the tax credit for dependent and child care, people with higher incomes might not get as huge of a break as those with lower incomes, but at least the credit won’t disappear altogether.
Your child must be no older than 12 (or disabled) for you to take advantage of this credit. In addition, the person who took care of this child could not have been your spouse or an ex who is the child’s other parent. Likewise, this person cannot be anybody else whom you are claiming as a dependent when you file taxes, or the child’s older sibling.
