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Summer Camp and Taxes
By Stacie Kitts, CPA
Pampered Camper
This summer I had the privilege of being included in the first ever Pampered Camper Event sponsored by the Girl Scouts of Orange County.
This grown up girl event organized to raise money for the benefit of girls in Orange County included a catered gourmet meal, wine tasting, a massage, arts and crafts, horseback riding, rock climbing, archery, hiking, boating, swimming and climate controlled cabins. Undoubtedly one of the greatest weekends ever!!!!!
Now that summer is over, I want to remind taxpayers to tell your tax preparer if you paid for the cost of day camp (sorry, overnight camp isn’t deductible) for your kids. Below is some helpful information for parents who are working or looking for work and have children under 13.
Pampered Camper
Here are five facts the IRS wants you to know about a tax credit available for child care expenses. The Child and Dependent Care Credit is available for expenses incurred during the summer and throughout the rest of the year.
- The cost of day camp may count as an expense towards the child and dependent care credit. [check with your tax preparer – there are some nuances related to the type of camp]
- Expenses for overnight camps do not qualify.
- Whether your childcare provider is a sitter at your home or a daycare facility outside the home, you’ll get some tax benefit if you qualify for the credit.
- The credit can be up to 35 percent of your qualifying expenses, depending on your income.
- You may use up to $3,000 of the unreimbursed expenses paid in a year for one qualifying individual or $6,000 for two or more qualifying individuals to figure the credit.
For more information check out IRS Publication 503, Child and Dependent Care Expenses. This publication is available at www.irs.gov or by calling 800-TAX-FORM (800-829-3676).
Links:IRS Publication 503, Child and Dependent Care Expenses
YouTube Videos:
Read This if you Need More Time to Pay Your Taxes
Katherman Kitts & CO. LLP
I can’t take credit for this headline. But it sounds like something I would write. Someone at the IRS thinks like me – scary thought!
Taxpayers who owe taxes may be relieved to know that there are some options for those who owe and can’t afford to pay the full amount right away.
Here are the top 10 things the IRS wants you to know if you need more time to pay your taxes.
1. Taxpayers who are unable to pay all taxes due are encouraged to pay as much as possible. By paying as much as possible now, the amount of interest and penalties owed will be less.
2. Based on the circumstances, a taxpayer could qualify for an extension of time to pay, an installment agreement, temporary delay or an Offer in Compromise.
3. If you cannot pay the full amount, taxpayers should immediately call the number or write to the address on the bill they receive.
4. You may want to consider financing the full payment of your tax liability through a loan. The interest rate and fees charged by a bank or credit card company are usually lower than interest and penalties imposed by the Internal Revenue Code.
5. If you cannot pay in full immediately, you may qualify for a short amount of additional time, up to 120 days, to pay in full. No fee is charged for this type of payment arrangement and this option may minimize the amount of penalties and interest you incur.
6. You may also want to consider an installment agreement. This arrangement allows you to make monthly payments after a one-time fee of $105 is paid. If you choose to pay through a Direct Debit from your bank account, the fee is reduced to $52. Lower-income taxpayers may qualify for a reduced fee of $43.
7. To apply for an installment agreement you can use the Online Payment Agreement application available on the IRS website; file a Form 9465, Installment Agreement Request; or call the IRS at the telephone number shown on your bill.
8. In some cases, a taxpayer may qualify for an offer in compromise, an agreement between the taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. Generally, an offer will not be accepted if the IRS believes that the liability can be paid in full as a lump sum or through a payment agreement.
9. Even if you set up an installment agreement, the IRS may still file a Notice of Federal Tax Lien to secure the government’s interest until you make the final payment.
10. It is important to respond to an IRS notice. If you do not pay your tax liability in full or make an alternative payment arrangement, the IRS is entitled to take collection action.
More information on the collection process is available at http://www.irs.gov.
Links:
- Payment Options – Ways To Make a Payment
- Other Ways to Resolve Tax Debt That Could Save You Money
- Online Payment Agreement Application
- Form 9465, Installment Agreement Request
- Publication 966, The Secure Way to Pay Your Federal Taxes
- Publication 594, The IRS Collection Process
Related Articles
- Mr. Shulman Our Fearless IRS Leader Is At It Again: Introducing the 2011 Offshore Voluntary Disclosure Initiative – Pay A Penalty and Stay Out of Jail (staciesmoretaxtips.wordpress.com)
- For My Student Followers – an Explanation of IRS Guidance Sent Out Into The Cosmos (staciesmoretaxtips.wordpress.com)
Stacie's Tax Stuff 