Tax help-please educate me

[Anonymous]

Does paying for preschool so my spouse and I can work (so essentially like daycare) qualify me for any sort of tax deduction? I was working along on Turbo tax and this section threw me off because i did not know about it before and no one discusses this. What if the preschool is only part time because we have in law help in the afternoons? Help.

[Anonymous]

Yes, you can write it off. Get the tax ID # from the preschool. Our kids went to a very part-time preschool and it had a # set up.

[Anonymous]

Only very little like 4k

[Anonymous]

Anonymous wrote:Yes, you can write it off. Get the tax ID # from the preschool. Our kids went to a very part-time preschool and it had a # set up.

It is not a business expense. It does qualify for the Child and Dependent Care Tax Credit, which is a share of $3000, depending on income.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yes, you can write it off. Get the tax ID # from the preschool. Our kids went to a very part-time preschool and it had a # set up.

It is not a business expense. It does qualify for the Child and Dependent Care Tax Credit, which is a share of $3000, depending on income.

So what does this mean? Please explain. This is what i am reading but i dont know how this translates. Or will Turbotax figure it out for me if i just input how much we pay the preschool?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes, you can write it off. Get the tax ID # from the preschool. Our kids went to a very part-time preschool and it had a # set up.

It is not a business expense. It does qualify for the Child and Dependent Care Tax Credit, which is a share of $3000, depending on income.

So what does this mean? Please explain. This is what i am reading but i dont know how this translates. Or will Turbotax figure it out for me if i just input how much we pay the preschool?

Go to the section on the child and dependent care credit and follow the directions. That's the credit you are talking about - the tax id number for the school is on their website. "Write it off" means take it as a business expense, which is not correct and not what you are looking to do.

Turbo tax will walk you through and you will write down your expenses and the id info for the provider. Then turbo tax will do the math.

[Anonymous]

OP here again. Sorry if i am being dense about this. So if HHI is 120k; do i just input how much we paid for childcare and this will reduce what we owe (and yes, it was looking like we owed a ton of money till i input this so this is why i am confused).

[Anonymous]

Anonymous wrote:OP here again. Sorry if i am being dense about this. So if HHI is 120k; do i just input how much we paid for childcare and this will reduce what we owe (and yes, it was looking like we owed a ton of money till i input this so this is why i am confused).

If you are using a program like H&R Block or Turbo Tax, you input the entire amount you paid. How much you actually get credit for depends on the situation, but the program will figure it out for you.

[Anonymous]

There's get the info and enter it in TurboTax--it will calculate how much of a tax credit you get through the Childcare Tax Credit. I believe the way it works is this: for one child, you can receive a tax credit for up to $3,000 dollars worth of childcare expenses, and for two or more up to $6,000. I believe it is for between 20-35% of your expenses on this amount, depending on your income (for most DCUMers, that would be 20% because I think that phase out starts at something like 40-50K). So if you have one kid, you can receive a tax credit of ~$600-1050 dollars, and for two that would be ~$1200-2100. This means your tax liability is reduced by that amount. It's not a deduction or a "write off," just a tax credit.

[Anonymous]

Anonymous wrote:There's get the info and enter it in TurboTax--it will calculate how much of a tax credit you get through the Childcare Tax Credit. I believe the way it works is this: for one child, you can receive a tax credit for up to $3,000 dollars worth of childcare expenses, and for two or more up to $6,000. I believe it is for between 20-35% of your expenses on this amount, depending on your income (for most DCUMers, that would be 20% because I think that phase out starts at something like 40-50K). So if you have one kid, you can receive a tax credit of ~$600-1050 dollars, and for two that would be ~$1200-2100. This means your tax liability is reduced by that amount. It's not a deduction or a "write off," just a tax credit.

You do understand that a dollar of credit is better than a dollar of deduction, right?

[Anonymous]

Right, I was just noting it was a tax credit and not a deduction

[Anonymous]

Anonymous wrote:Right, I was just noting it was a tax credit and not a deduction

New poster, with a polite & respectful request for you and others who get picky about the technical differences between credits, deductions, write-offs, etc: Yes, we understand there are important differences among these items, and that they get treated differently by the Tax Code and in returns. However, when someone is asking a basic question -- such as "Is ____ deductible?" -- it's really disruptive to the discussion to have a tangential battle over technical terminology. It's especially frustrating to see someone belittle other posters or their contributions because they used the wrong terminology. Regardless of whether the item is a credit or a deduction, or whether it can be "written off," the poster is usually just asking whether she can get some tax benefit or not. Can you all please, please, please try to focus on the substantive question without bickering over the technical details? It would improve the attitude of this forum, and might keep us from devolving into the snark-fest that we see on other forums. Thanks for your consideration.

[Anonymous]

Childcare credit is crap it should be unlimited

[Anonymous]

OP, if you used a pre-tax savings account for childcare expenses, you can't use the tax credit being discussed. It's one or the other. If you have the option to use a pre-tax savings account in the future, it would probably save you more money than the tax credit at your income level.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Right, I was just noting it was a tax credit and not a deduction

New poster, with a polite & respectful request for you and others who get picky about the technical differences between credits, deductions, write-offs, etc: Yes, we understand there are important differences among these items, and that they get treated differently by the Tax Code and in returns. However, when someone is asking a basic question -- such as "Is ____ deductible?" -- it's really disruptive to the discussion to have a tangential battle over technical terminology. It's especially frustrating to see someone belittle other posters or their contributions because they used the wrong terminology. Regardless of whether the item is a credit or a deduction, or whether it can be "written off," the poster is usually just asking whether she can get some tax benefit or not. Can you all please, please, please try to focus on the substantive question without bickering over the technical details? It would improve the attitude of this forum, and might keep us from devolving into the snark-fest that we see on other forums. Thanks for your consideration.

It's not a matter of technical terminology, pp. Yo make it sound like there's a negligible difference, when in fact there is a material one.

If you have a $100 tax credit, you save $100 in taxes.

If you have a $100 tax deduction, you save maybe $25 in taxes (or less, depending on your tax bracket).

The distinction between a business write-off/deduction and a personal is also quite fundamental. This is not a semantics thing.

The people pointing out the difference are not being snarky. On the contrary, they're genuinely trying to help people understand and avoid mistakes.