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Child Care While You Work
It’s no surprise that the cost of rais-
ing a child is increasing, but there are
several tax credits that may ease your
tax burden. Among the many expenses
parents incur is child care. You may
be eligible for the Child and Depend-
ent Care Tax Credit if you currently pay
for care for your under-age 13 depend-
ent child or children so that you can be
gainfully employed. To claim the credit,
the child must live with you for more
than half the year.
NOTE: The credit also can apply to
your disabled child over age 13, disa-
bled spouse, or dependent parents. The
credit also may be available if you are
unemployed and searching for a job.
Qualifying Expenses Can Include:
• In-home related expenses of a house-
keeper, babysitter or cook.
• Services performed by a dependent
care center if the center is certified
and in compliance with all local laws.
• A portion of boarding-school ex-
penses but not overnight camp fees.
• Summer school.
• Day camp.
• Care centers for sick children.
• Kindergarten expenses.
• Live-in caregivers.
The credit ranges from 20 to 35 per-
cent of qualified employment-related
expenses but is subject to a cap calcu-
lated as a percentage of these expenses.
The maximum amount of eligible ex-
penses is $3,000 if you have one quali-
fying dependent and $6,000 if you have
two or more qualifying dependents.
Make sure to retain accurate records
and receipts for all of your care expens-
es. It is advisable to secure IRS Form
W-10 from care providers. Alternatively,
year-end statements with the care pro-
vider’s EIN will suffice in meeting the
IRS documentation requirement.
If you work for an employer that
provides for tax-advantaged, depend-
ent care assistance, that may result in
taxable income. However, there is an
exclusion available, and some taxpay-
ers may be able to take advantage of
flexible spending account (FSA) pro-
grams enabling them to make tax-free
contributions that can be used to pay
child care expenses later on. Below are
a few of the details:
1. Up to $5,000 of dependent-care as-
sistance that you receive from an
child care program for employees
is completely tax free (the figure is
$2,500 for married, filing separate
income tax returns). The exclud-
able assistance must be for the care
of children for whom the child-care
credit is available.
2. If your employer maintains a cafete-
ria plan, the amount you elect to re-
ceive for child-care assistance under
the plan is tax-free if the benefit pro-
vided doesn’t exceed $5,000 ($2,500
for married, filing separately).
3. Your employer may maintain a
flexible spending account that es-
sentially allows you to choose to
reduce your salary by an amount
that’s set aside in an account set up
to pay for child-care expenses (up
to $5,000 or $2,500). In effect, such
a plan enables you to pay for part
or all of your child-care expenses
with pre-tax dollars.
If you are provided with some form
of employer-provided assistance, you
may need to consider whether to use
the cafeteria plan or flexible spending
account or pay for the care expenses
with your own cash and claim a tax
credit. If you are in this position, a deci-
sion must be made well before the be-
ginning of each year.
October and November are good
months for evaluating tax-impact-
ing decisions such as child care
YOU COULD BE ELIGIBLE FOR A TAX CREDIT
With a new home at The Preserve at Laureate Park, you’re perfectly poised to
make the most of each day. Whether it’s the quick access to Orlando’s major
employment centers and world-renowned entertainment, or the abundant
greenery, parks, and trails throughout Lake Nona. Plus, at Laureate Park’s
Village Center, you’ll find lakeside dining, a fitness facility, and an expansive
Aquatic Center made for both childhood fun and grown-up relaxation.
Offer void where prohibited or otherwise restricted by law. All information (including, but not limited to prices, availability, incentives, floor plans, site plans, features, standards and options, assessments and fees, planned amenities, programs, conceptual artists’ renderings and community development plans) is not guaranteed and remains subject to change or delay without notice.
Maps and plans are not to scale and all dimensions are approximate. Please see a Taylor Morrison Sales Associate for details and visit www.taylormorrison.com for additional disclaimers. © May, 2016, Taylor Morrison of Florida, Inc. All rights reserved.
taylormorrison.com | 407.756.5025
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5 OCTOBER 2016
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