This great tax tip was provided by Gina L. Gwozdz, CPA is the owner of Gina’s Tax Service.
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.
You have two ways of putting more cash in your pocket. You can make more or you can spend less. If you’re going to spend less, why not spend less taxes? Tax planning from Gina’s Tax Service provides you with specific tax strategies, like the one mentioned above, designed to beat the IRS legally, morally and ethically. You can spend all sorts of time, money and effort promoting your business, but that can’t guarantee results. Having a tax plan loaded with specific tax strategies such as deducting your child’s braces guarantees savings.
The goal of Gina’s Tax Service (http://GLGcpa.com) is to help all her clients minimize their tax liability within the constraints of the law. Gina L. Gwozdz, CPA is the owner of Gina’s Tax Service. She worked for over 10 years full time outside the home and then quit the corporate lifestyle to stay home to raise her child. She always missed working, so as soon as her child was attending school full time, she started her own company. Now she is able to provide her clients with a service she believes is most valuable to small businesses – tax planning, and still have time for her family. If you’re not sure that tax planning would provide you any benefits, take a minute to read some testimonials (http://glgcpa.com/testimonials.htm).
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