With Labor Day weekend upon us, most parents (and kids) know it’s that time of year. If the bevy of commercials haven’t given you the hint, a new school year is now upon us. With that, parents are expected to spend an average of $400 on back-to-school shopping, including clothes, electronics, school supplies and extracurricular activities.
While many people are not thinking about next year’s taxes in late August, doing so could save you quite a bit of money come next April. This post will provide some guidance on what school supplies and costs could be tax deductible.
The Child and Dependent Care Tax Credit – While you may already be familiar with this credit, it is worth mentioning that child care tax credit could be between 20 and 35 percent. It is applied to the first $3,000 in qualifying expenses for one child, and is extended to $6,000 in expenses for two children.
After school care – If you work a full day and need child care during the afternoon hours, this type of care can be tax deductible.
Pre-kindergarten – If you pay tuition for pre-kindergarten, chances are that the tuition will be tax deductible. Pre-Kindergarten is considered “care” under federal guidelines.
Be wary of school donations – School donations are generally tax deductible. However, parents must be wary of making donations that only benefit their child. The guidelines say that donations made to your children’s school, for the benefit of all children are tax deductible.
If you have additional questions regarding what can be tax deductible, an experienced tax attorney can help