Get A Tax Break Sending Your Kids to Camp
Author: RichardChapo Total views: 16 Word Count: 389
The old saying is no good deed goes unpunished. This often seems particularly true when paying taxes, but occasionally some good news comes along. For instance, are you aware the IRS allows you to claim a tax credit for sending your kids to summer camp?
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 is the tax credit so powerful? The answer is simple. A tax credit is a dollar for dollar reduction from the actual amount of tax you owe the IRS. You deduct it from the final tax amount you would normally write a check for to the IRS.
Okay, so we now understand the power of tax credits. What does any of this have to do with your kids? Well, the tax code has a unique provision that gives you a tax credit break for sending kids 12 and under to summer camp.
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.
The sliding scale starts at 15,000 dollars. Up to this amount, you can claim a credit of 35 percent of your cost. The percentage decreases as you make more money. It levels off at 20 percent for people making $43,000 or more.
To determine your exact percentage, you should look at the exact sliding scale the IRS publishes. It can be found in publication 503. You can order this or just pull it off the site the agency maintains.
I fully understand that thinking about taxes in the middle of summer is probably not high on your list of things to do. In this case, it should be. A tax credit is a valuable thing, so make sure to claim all you can.
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About the Author
To learn more about tax credit issues such as California tax credits written by Richard Chapo at BusinessTaxRecovery.com.
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