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| Tax Tip |
When it comes to taxes, a credit is so much better than a deduction: It reduces your tax bill dollar for dollar. Missing one is even more painful than missing a deduction that simply reduces the amount of income that's subject to tax. It's easy to overlook the child-care credit if you pay your child-care bills through a reimbursement account at work. While only $5,000 of such expenses can be paid through a tax-favored reimbursement account, up to $6,000 (for the care of two or more children) can qualify for the credit.
If you run the maximum through a plan at work, but spend even more for work-related child care, you can claim the credit on an extra $1,000. That would cut your tax bill by at least $200. Check with your tax advisor to see if you can take advantage of this tax credit.
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| Disclaimer |
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References to books, software, websites, or products are suggestions only and do not constitute or imply an endorsement. |
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