Posts

School is Out! Remember to Keep These Summer Tax Tips in Mind For Your Child’s Daycare…



Child with Books

The Child and Dependent Care Tax Credit is available for childcare expenses incurred throughout the year.

School is out! For many families with young children, that means finding daycare facilities or babysitters to watch the kids. When you’re making plans don’t forget about the Child and Dependent Care Tax Credit!

This credit is available for childcare expenses incurred throughout the year so parents are able to work or look for work. Below is a reminder of what you need to know:

  • To qualify, children must be under age 13
  • Either at-home sitters or daycare facilities outside of the home may qualify
  • Overnight camps and summer school/tutoring do not qualify
  • The credit is available for up to $3000 of unreimbursed expenses paid in a year, for one qualifying child, or $6000 of unreimbursed expenses for two or more qualifying children

You will want to be sure to save receipts and documentation to reference when filing your taxes. Also, you are required to report the Employee Identification Number (EIN) of the camp, location, and dates the child(ren) attended, so be sure to keep track of these items throughout the year.

Sources + Forms
Child and Dependent Care Expense Tax Credit

Keep the Child and Dependent Care Tax Credit in Mind for Summer Planning

This Tax Season is Almost Over, But Stay Organized for the Next!



charitable_contributions

If you plan to make charitable contributions throughout the year, you’ll want to be sure to keep your records organized for next tax season. (Photo Credit office.microsoft.com)

Tax season is almost over, but you’ll want to stay organized for next year! If you plan to make charitable contributions throughout the year here are a few tips regarding what you’ll need in order to deduct those contributions:

Which Organizations Qualify?
You may only deduct contributions if they are made to legitimate qualified organizations. Donations to political organizations, candidates, or specific individuals don’t count. IRS Publication 526 can help you determine if an organization qualifies.

How do I Claim a Charitable Contribution?
How you claim your charitable contribution depends upon how much you donated. If noncash contributions exceed $500, then you must complete Form 8283, Noncash Charitable Contributions. If they are below $500 then you complete Form 1040, and itemize donations under Schedule A.

If your donation is valued at $5,000 or more, you must complete Section B of Form 8283.

What if I Received ‘Perks’ Because of My Donation?
If you received any perks in exchange for a donation (ie baseball tickets, merchandise, discounted or free services, etc.) then you may only deduct the amount that exceeds the fair market value of the perk you received.

So, if you donated $50 and, as a result of that donation you received two baseball tickets with a fair market value of $30, you may only deduct $20.

Do I Need to Keep Any Records of My Donations?
Yes! You must keep records of the items you donated. Below are examples of acceptable records:

  • Cash, Check, Monetary Gifts Under $250 – You must keep a bank record, payroll deduction record, or written communication from the organization (this written piece must contain the name of the organization, as well as, the date and amount of the contribution).
  • Cash, Check, Monetary Gifts Exceeding $250 – In addition to the items listed above, you also need documentation from the organization detailing whether you received any benefits or perks as a result of your donation.
  • Text Message Donations – A phone bill is acceptable documentation, as long as, it details the date, the name of the organization, and a transcript of the donation amount.

Remember, keeping track of these items now will help reduce stress next year.  If you have any questions, or need any additional information, please contact your H&S tax professional at 800.924.6891.

Forms + Sources
IRS Publication 561, Determining the Value of Donated Property
IRS Publication 526 (2011) Charitable Contributions
Form 8283, Noncash Charitable Contributions