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Tax question - daycare related
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BabyAvocado
Happy New Year
Member since 5/05 17334 total posts
Name:
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Tax question - daycare related
Now that Jake is in daycare, next year DH and I will be able to claim our daycare expenses.
I'm curious - how much do you get back from it or how does the credit work?
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Posted 4/16/07 10:28 AM  |
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pmpkn087
Life is good...
Member since 9/05 18504 total posts
Name:
Stephanie
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Re: Tax question - daycare related
I *think* the daycare is considered "non-taxable" income. So, it lowers your taxable income and can put you in a lower bracket.
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| Posted 4/16/07 10:35 AM |
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Bxgell2
Perfection
Member since 5/05 16438 total posts
Name:
Beth
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Re: Tax question - daycare related
A percentage of the amount you spend on daycare expenses can be listed as a child and dependent care "tax credit" on your taxes. It is not deducted BEFORE taxes, but listed as an after-tax credit.
If, through your employer, you can sign up for a dependent care flexible spending account, your employer will arrange for money to be deducted from your paycheck, PRE-TAX, and put into an account that you can draw upon for daycare. You cannot claim the dependent care tax credit if you use a flexibile spending account. It's best to consult with an accountant to determine which option works best for your tax purposes.
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| Posted 4/16/07 10:45 AM |
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BabyAvocado
Happy New Year
Member since 5/05 17334 total posts
Name:
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Re: Tax question - daycare related
Great info Beth - thanks!!
I know my job does offer a Flex spending account but I had no idea what it was (never paid attention b/c I thought it didn't apply to me). I will look into it.
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| Posted 4/16/07 10:49 AM |
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Bxgell2
Perfection
Member since 5/05 16438 total posts
Name:
Beth
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Re: Tax question - daycare related
Posted by BabyAvocado
Great info Beth - thanks!!
I know my job does offer a Flex spending account but I had no idea what it was (never paid attention b/c I thought it didn't apply to me). I will look into it.
No problem - this is where my past experience in HR, and numerous tax classes in law school come in handy 
Check with your company because a flexible spending account can come in two forms - a medical expense spending account and/or daycare spending account. Some companies offer only one, some offer both.
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| Posted 4/16/07 10:57 AM |
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pugmama
April already?
Member since 3/06 5297 total posts
Name:
Erica
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Re: Tax question - daycare related
We have the flex spending for daycare and medical and it saves alot of money in the long run- I would look into it.
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| Posted 4/16/07 11:53 AM |
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