glgcpa
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| Fri Sep 15, 2006 8:27 am Tax Credit for Your Child's Summer Camp |
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Did your children attend a day camp this summer so you
and your spouse could work or go to school full time?
If so, you may be able to get a tax credit for the
fees you paid for your children to attend day camp. A
tax credit reduces the amount of tax you pay dollar
for dollar, unlike an itemized deduction, which
reduces your tax bill based on your tax rate.
In 2006, the child and dependent care credit can save
you up to $3,000 if you spend enough on care for one
child under age 13. If you have more than one child in
that age group who qualifies, the credit can save as
much as $6,000. Money spent on care for disabled older
children also is covered. For all eligible children,
the tax credit ranges from 20% to 35% of the money
spent on eligible child care. Summer day camps are
considered eligible child care. Overnight camps do not
qualify. As with most credits and deductions, the
higher your income, the lower the credit available. If
your family income is over $43,000, the credit rate is
20%.
How would this work?
If you spend $500 sending your eligible children to
day camps this summer, so you and your spouse can
work, and your income is greater than $43,000 you will
save $100 in taxes. If you spend another $5,500 during
the school for before and/or after school care, such
that you and your spouse can work, you will save
$1,200 in taxes.
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About the Author:
"Tax Credit for Your Child's Summer Camp" was written
by Gina L. Gwozdz, CPA, the owner of Gina's Tax Service
(http://GLGcpa.com). The goal of Gina's Tax Service is
to minimize her client's taxes within the constraints of the
law. |
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