Tax Benefits of Sending Kids to Summer Camp
submitted: Aug 16th 2008 |
by: RichardChapo |
Total views: 1 |
Word Count: 391 |
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Summer rolls around and it is time to send the kids to summer camp. The first thing you will notice is the cost of doing so is significant. Shockingly, the IRS is reminding parents that there is a tax break that can help pay the bill.
A quick world on tax credits. They are the proverbial golden egg for taxpayers, yet most people do not realize as much. If you have the choice of claiming a tax deduction or tax credit, always go with the tax credit. Why? It will save you more money.
Why should we all kneel at the feet of the might tax credit? The answer is timing. It is the last thing you do with your tax return. Figure out your taxes so you know the exact amount to pay the IRS. Now subtract your tax credits.
At this point, you are probably wondering how this relates to summer camp fun for the kids. Well, most working parents send kids to summer camps. If you child is under 13, you are in for some excellent tax news.
You can claim the cost of camp as part of the child care credit. Oddly, this can only be claimed for a day camp. If the kids stay overnight, the cost does not qualify. Why this is so is very unclear.
The amount you can claim involves a bit of math and the total credit is capped at $3,000 for a single child and no more than $6,000 for two or more children. The calculation is essentially 20 to 35 percent of the cost of the camp.
Income is also a factor in figuring the credit as you might expect. The 35 percent rate applies if your income is under $15,000. The 20 percent rate, if your income is over $43,000. The percentage moves down as your income increases.
Should you wish to metaphysically poke yourself in the eye or cure a bad case of insomnia, you can read more in IRS publication 503. It is a 23 page thriller that will make the latest Stephen King novel read like so much drivel.
Tax issues are not always the most exciting subjects until you need to fill out those tax forms. Whenever possible, look for tax credits you can claim and save some money. They add up quickly and can greatly reduce your tax bill.
About the Author
To learn more about tax credit issues such as the solar tax credit written by Richard Chapo at BusinessTaxRecovery.com.
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