Quick Tax Tips

Posted on April 1, 2004, in Momorandums, with 0 Comments

Attention all NON-CPAs: with April 15th around the corner, even if you outsource your tax prep, it doesn’t hurt to have a couple of suggestions up your sleeve that might soften the blow (or sweeten the refund). Thus, our favorite tip for today (and one for tomorrow):

Know about the Child Care/Dependent Care CREDIT

If both you and your spouse were working in 2003 and therefore paid for childcare (i.e. a nanny or daycare), you are likely entitled to a Childcare tax credit. Better than a deduction– this works dollar for dollar against your taxes. Expect the credit to range from 20- 35% of your qualifying childcare expenses, or up to $3,000 for the year for one qualifying individual and up to $6,000 for two or more. (We know, not even CLOSE to what you paid in full, but still, this can be major money back). To claim the credit, you’ll need to provide the name, address and taxpayer identification number of the care provider. Ask your accountant, or learn more on your own:

irs.gov (child care credit page)

And file this away for the future…

Coming soon (we hope) — an easier way to file your household employee forms. Based on pending legislation in New York and other states, it may be possible to include the amount due to the state ALONG WITH your federal tax forms — enabling you to deal with the joys of tax filing on account of a childcare employee just once a year, instead of once a quarter. (Unquestionably, this is one case in which less is indeed more).